Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Derwent Valley Water Board Bill,

Metropolitan Water Board Bill,

Lords Amendments considered, and agreed to.

Isle of Wight Water Bill [Lords],

Read the Third time, and passed, with Amendments.

Wessex Electricity Bill [Lords] (King's Consent Signified),

Bill read the Third time, and passed, with Amendments.

Mersey Tunnel (Birkenhead Entrance, etc.), Bill [Lords],

Read a Second time, and committed.

Ordered, That Standing Orders 82, 211, 236, and 237 be suspended, and that the Committee on the Bill have leave to sit and proceed To-morrow.—(The Deputy-Chairman.)

Liverpool Corporation Bill [Lords],

Ordered, That the proceedings on the Consideration of the Liverpool Corporation Bill [Lords] [15th July] be null and void.

Bill, as amended, to be considered upon Thursday.—(The Deputy-Chairman.)

AYR BURGH (WATER, ETC.) ORDER CONFIRBIATION BILL,

"to confirm a Provisional Order under the Private Legislation Procedure (Scotland) Act, 1899, relating to Ayr Burgh (Water, etc.)," presented by Secretary Sir JOHN GILMOUR; read the First time; and ordered (under Section 9 of the Act) to be read a Second time upon Tuesday, 26th July, and to be printed. [Bill 175.]

Oral Answers to Questions — INDIA.

OPIUM TRAFFIC.

Mr. DALTON: 1.
asked the Under-Secretary of State for India whether the Government of India is appointing a committee to investigate the opium traffic in India; if so, what are the terms of reference; and whether the committee will include independent members?

The UNDER-SECRETARY of STATE for INDIA (Earl Winterton): The Government of India announced in June, 1926, that they had been considering
suggestions for an inquiry of the kind referred to by the hon. Member, but had decided that it was unnecessary.

Mr. WARDLAW-MILNE: If there is an inquiry at any time, will steps be taken to see that the tremendous sacrifices made by the Government and peoples of India are brought out?

MARITIME STATES, KATHIAWAR PENINSULA (CONFERENCE).

Colonel DAY: 2.
asked the Under-Secretary of State for India whether the Report of the proceedings of the Conference which took place at Mount Abu on 27th June between the representatives of the Government of India and the maritime States in the Kathiawar Peninsula has been received by his Department; and is he in a position to make a statement?

Earl WINTERTON: The answer to both parts of the question is in the negative.

Colonel DAY: Will the Report of the proceedings be placed in the Library of the House, so that hon. Members can see it?

Earl WINTERTON: No, Sir, I cannot answer that at the present time. I shall have to see the Report first.

CHOLERA (VACCINE).

Mr. GRIFFITHS: 3.
asked the Under-Secretary of State for India whether his attention has been drawn to the discovery of a vaccine the use of which by the Bengal Health Association in Kulpi Thana, Bengal, has led to speedy recovery of patients suffering from cholera; and whether, in view of the great importance of such a discovery, the Government propose to offer special facilities to the association to carry out extended trials with the new vaccine?

Earl WINTERTON: My Noble Friend has no information on the subject beyond what has appeared in the Press.

COTTON MILL INDUSTRY.

Mr. GRIFFITHS: 4.
asked the Under-Secretary of State for India whether the Government of India has received any representations from bodies representative of Indian industrial and commercial opinion in regard to the Government's
refusal to take action along the lines recommended by the Textile Tariff Board to protect the indigenous cotton manufacturing industry; and whether he will inform the House of the number and names of bodies from which such representations have been received and the terms of the representations?

Mr. KELLY: 5.
asked the Under-Secretary of State for India whether his attention has been drawn to the fall in cotton mill shares in Bombay and to the fears that, owing to the Government's refusal to take action to introduce a measure of protection on the lines recommended in the Report of the Textile Tariff Board, a number of mills will have to go into liquidation; and whether, in face of this position, the Government will reconsider the decision they have taken regarding the Board's recommendations?

Earl WINTERTON: The answer to the first part of each question is in the affirmative. A conference of representatives of the cotton mill industry in different parts of India was held under the auspices of the Bombay Mill Owners' Association on the 20th June to protest against the decisions of the Government of India. My Noble Friend has been informed by the Bombay Mill Owners' Association that the Upper India Chamber of Commerce and the Mysore Chamber of Commerce telegraphed their entire sympathy with the object of the conference. I do not know whether any other bodies have submitted represntations. The text of the representations cannot be given within the limits of a Parliamentary reply, but the main point is that a measure of protection adequate to the needs of the situation is asked for. I understand that on the 12th July the Viceroy received a deputation of mill owners and gave them an assurance that their views as presented would receive the most careful consideration of his Government.

Mr. T. SHAW: Will the Noble Lord say whether these mill owners already have a measure of protection, and, if so, how much?

Earl WINTERTON: Perhaps the right hon. Gentleman will put down a question if he wishes to know the details, as it would be rather a long answer; but it is a fact that they already enjoy a measure of protection.

SMUGGLING, MADRAS (GOLD THREAD).

Mr. KELLY: 6.
asked the Under-Secretary of State for India whether the Government of India has received from the associated chambers of commerce in India or other bodies any representations in regard to the problem of alleged evasion of import duty by smuggling of goods, particularly gold thread, into Madras; whether he will give the terms of such representations; and what action the Government of India propose to take in this matter?

Earl WINTERTON: My Noble Friend has no information beyond a Press report which states that such representations have been made and that the Government of India have the matter under consideration.

CHARGE OF ASSAULT, MADRAS.

Mr. WARDLAW-MILNE: 7.
asked the Under-Secretary of State for India whether he has caused any inquiries to be made regarding the assault upon an Indian servant at Spencer's Hotel, Madras; and, if so, what the results of his inquiries are?

Earl WINTERTON: Yes, Sir. My Noble Friend caused a letter to be sent to the Government of India by last mail asking whether the particulars furnished by the right hon. Gentleman the Member for Preston (Mr. T. Shaw) are sufficient to enable them, after this considerable lapse of time, to obtain any information regarding the case. Some weeks must necessarily elapse before the results can be received. I would add that I have been unable to trace in the British or Indian Army List the name Bramby mentioned by the right hon. Gentleman.

Mr. WARDLAW-MILNE: Is the Noble Lord aware that the facts of this case are well known in Madras and to many people now in this country, and that no assault was committed by a European officer on a servant in India, but that it was a European lady—woman—who committed an assault upon a servant, and can these facts not be made public at once?

Earl WINTERTON: I have received indirectly certain information from a responsible but not an official source, and I have taken steps to verify that information. The information appears to relate
to the same incident as that mentioned by the right hon. Gentleman the Member for Preston. but it differs in many important and material particulars from the version given by the right hon. Gentleman.

Oral Answers to Questions — EAST AFRICA.

KENYA.

Mr. ERNEST BROWN: 8.
asked the Secretary of State for the Colonies if he will now state the facts as to the recent disturbances in Kenya Colony with the Somalis; and if his Department has yet received an official despatch as to the cattle troubles?

The SECRETARY of STATE for the COLONIES (Mr. Amery): I have nothing yet to add to what I have said in reply to previous questions.

Mr. CECIL WILSON: 11.
asked the Secretary of State for the Colonies whether he is aware that the Government of Kenya Colony is contemplating granting a concession in a native reserve in the Tana Valley to a European group concerned with sugar production; that three administrative officers of increasing degrees of seniority have been sent in succession to that area; that these officers have used their influence to try to persuade the natives to give up land for the purpose stated; that the native chiefs have so far withstood any pressure brought upon them to give up land in this area; and whether he can assure the House that active persuasion of the natives shall cease and that disciplinary action shall not be taken against the native district council or the Ndia people?

Mr. AMERY: I have no information on this subject.

Mr. WILSON: Will the right hon. Gentleman make inquiries?

Mr. AMERY: If the hon. Gentleman will furnish me with particulars as to the source of his information, I will try to do so.

Sir ROBERT HAMILTON: 18.
asked the Secretary of State for the Colonies whether he has yet received a reply from the Government of Kenya with reference to Mr. Pollok's complaints regarding his treatment in the matter of railway contracts?

Mr. AMERY: No, Sir.

FEDERATION COMMISSION.

Mr. HERBERT WILLIAMS: 15.
asked the Secretary of State for the Colonies if he is in a position to state the names of the members of the East African Commission?

Mr. RENNIE SMITH: 13.
asked the Secretary of State for the Colonies if he can give the names of the persons to serve on the Commission which has been appointed to inquire into the proposal for an East African Federation?

Mr. AMERY: I am not yet in a position to give the names.

BRITISH PRODUCTS (PREFERENCE).

Mr. H. WILLIAMS: 16.
asked the Secretary of State for the Colonies whether, in the event of the inclusion of the Tanganyika Territory in an East African Customs Union, steps will be taken to ensure that such a union will not prevent preference to British products entering British East African possessions?

Mr. AMERY: The inclusion of Tanganyika Territory in a Customs Union will not affect the international obligations of the other British dependencies in East Africa.

Mr. WILLIAMS: Do I understand that the other British dependencies are debarred from affording any preference?

Mr. AMERY: Yes, Sir, under the old Berlin and Brussels Act, which was revised by the Treaty of St. Germain en Laye, they are debarred from giving preference to British trade.

RAILWAY CONSTRUCTION.

Lieut.-Colonel WINBY: 17.
asked the Secretary of State for the Colonies whether the Report by the experts appointed to consider railway construction in East Africa has now been made; and whether he is in a position to make any statement on the matter of the bridge over the Zambesi River?

Mr. AMERY: I would refer to the reply given to a similar question on 13th June. I am not yet in a position to make any statement on the matter of a bridge over the Zambesi.

Lieut.-Colonel WINBY: Can the right hon. Gentleman say when he will be in a position to do so?

Mr. AMERY: The matter requires a good deal of consideration. Naturally, am as anxious to push it forward as anyone else.

SOUTH AFRICA (PORT, WALFISCH BAY).

Sir ROBERT THOMAS: 9.
asked the Secretary of State for the Colonies whether there has been any development of the port of Walfisch Bay since the war; what tonnage of ships the harbour will accommodate; whether he can give any figures of annual trade; and whether it is intended to develop it as an important port?

Mr. AMERY: This is a matter which concerns His Majesty's Government in the Union of South Africa, but I will send the hon. Member such information regarding this port as is available in recent Union official publications.

Sir R. THOMAS: Will the right hon. Gentleman during his visit to South Africa make inquiries on the spot?

Mr. AMERY: I may have an opportunity.

COLONIES (MEDICAL RESEARCH).

Lord APSLEY: 10.
asked the Secretary of State for the Colonies what action is being taken to give effect to the proposals for the organisation of medical research in the Colonies which was made at the recent Colonial Office Conference?

Mr. AMERY: In consultation with the Medical Research Council, I have appointed a Committee with the following Terms of Reference:
To advise the Secretary of State and the Medical Research Council upon the initiation and promotion of medical research in the interests of the Colonial Empire; upon the recruitment and conditions of service of the necessary personnel; and upon the management and allocation of any funds available for these purposes.
The composition of the Committee will be as follows:

Chairman:

The Right Hon. W. Ormsby-Gore.

Deputy-Chairman:

Sir George Maxwell.

Other Members:

(1) The Secretary of the Medical Research Council (ex-officio).
(2) The Chief Medical Adviser to the Secretary of State for the Colonies (ex-officio).
(3) Professor J. W. W. Stephens.
(4) Sir Leonard Rogers.
(5) Dr. Andrew Balfour.
(6) Dr. Charles Todd.
(7) Dr. P. H. Manson-Bahr.
(8) Dr. C. M. Wenyon.

IRAQ (RIOT, KHADIMAIN).

Mr. LUMLEY: 12.
asked the Secretary of State for the Colonies if he can give any information as to the cause of the recent riot in the mosque of Khadimain?

Mr. AMERY: The causes that led to the riot are still somewhat obscure. I understand that the Iraq Government propose to institute a special Court of Inquiry on the subject.

NEWFOUNDLAND (CORNERBROOK PAPER MILLS).

Sir R. THOMAS: 19.
asked the Secretary of State for Dominion Affairs how long the negotiations new in progress regarding the sale of the Cornerbrook Paper Mills are expected to take?

Mr. AMERY: I am afraid that I am unable to give any forecast of the time that the negotiations now in progress are likely to take.

IRISH GRANTS COMMITTEE.

Sir BASIL PETO: 20.
asked the Secretary of State for Dominion Affairs how many cases have now been heard by the Irish Grants Committee; whether he can form any opinion as to when the labours of the committee will end; whether the final result of the recommendations to the Government will be communicated to the House; and whether, in each case, the recommendation by the committee will be communicated to the claimant?

Mr. AMERY: In reply to the first part of the question, I am informed that the committee have considered 1,200 of the 3,036 cases referred to them. I regret that I am not at present in a
position to reply to the other three parts of the question otherwise than by saying that I do not anticipate that the work of the committee will be finished much, if at all, before the end of the financial year, and that it is unlikely that the Government will reach a decision as to what final action they will take in the matter before then.

Sir B. PETO: May I ask for an answer to the last part of the question, as to whether the amount of the recommendation will in each case be communicated to the claimant, so that he shall know where he stands?

Mr. AMERY: No, Sir, the Government can only decide whether it is desirable to do that when it is in a position to review the whole situation, and to know how far it can satisfy all the recommendations of the committee.

Mr. BUCHANAN: Is it the case, according to the answer of the right hon. Gentleman, that the claimants may not get the full amount allocated by the Committee, and that it depends on the decision of the Government?

Mr. AMERY: It does to some extent, but I hope we shall be able to satisfy the claimants substantially.

Sir B. PETO: 21.
asked the Secretary of State for Dominion Affairs whether the interim payments being made to claimants before the Irish Grants Committee are made on a fixed proportion of the compensation recommended in each ease; and, if not on what method the interim payment is computed?

Mr. AMERY: The answer to the first part of the question is in the negative. In reply to the second part, I understand that the Committee only recommend interim payments in cases in which it appears from the evidence before them that the applicant is in need of immediate financial assistance; and that in such cases the amount of the interim payment recommended is arrived at, within the limits of the total recommendation which the Committee propose to make, after taking account of the applicant's needs.

EMPIRE SETTLEMENT.

Major GLYN: 22.
asked the Secretary of State for Dominion Affairs whether, in
view of the importance of migration to all parts of the British Empire, he will consider the reorganisation of the Overseas Settlement Committee for the purpose of enabling the particular problems of South Africa, Australasia, and Canada to receive that special attention that special circumstances demand?

Mr. AMERY: I invite my hon. and gallant Friend's attention to my answer to his question on the 14th instant. I have no reason for supposing that the particular problems of the several Dominions have not received and do not receive such special attention as they require from the Overseas Settlement Committee as at present constituted.

Major GLYN: Is the right hon. Gentleman aware that the answer which I received on the 14th inst. was that the constitution of the Committee is at present receiving consideration? The point of my question was whether one Committee, no matter how competent is capable of understanding the whole of these problems.

Mr. AMERY: The Committee endeavours to work in liaison and close communication with the migration authorities of the several Governments. It does not profess in itself to have the fullest knowledge of the details in each colony and each Dominion. I believe it is more satisfactory for one Committee, through one executive head, to deal with the different Dominion organisations in this country.

Mr. SOMERVILLE: Can the right hon. Gentleman say whether the migration Committees in the Dominions are under the control of the High Commissioners, or does the Overseas Committee deal directly with the Dominion Governments?

Mr. AMERY: Normally the migration activities of each Dominion in this country are under the authority of the High Commissioner, and the Overseas Settlement Office deals with the High Commissioner's Office through the Migration Branch. Of course, we also deal directly with the Governments, and at the present moment the Canadian Minister of Migration and the Deputy-Minister of Migration are both in this country and have been in close communi-
cation and consultation with Lord Lovat and the members of the Overseas Settlement Committee.

Major GLYN: Does the right hon. Gentleman's reply mean that he is quite satisfied that the present Committee is serving its purpose very well?

Mr. AMERY: Yes, Sir.

Colonel DAY: Have any complaints been received with regard to these matters?

Mr. AMERY: No, Sir.

Oral Answers to Questions — TRADE AND COMMERCE.

EXPORT INSURANCE SCHEME.

Mr. BUCHANAN (for Mr. STEPHEN): 26.
asked the Parliamentary Secretary to the Overseas Trade Department the full details of the Government export insurance scheme; and whether the scheme will apply to Russia among other countries?

Mr. A. M. SAMUEL (Secretary, Overseas Trade Department): The full details are too long to be given conveniently in reply to a question. I am therefore arranging to place in the Library copies of a publication describing the facilities, and also of the floating contract by which bills of exchange are guaranteed. I will send similar copies to the hon. Member. The answer to the last part of the question is in the negative.

Colonel DAY: Will the copy that is placed in the Library also show the different rates charged?

Mr. SAMUEL: No, the rates depend on the character of each transaction.

CURED HERRINGS (EXPORT).

Sir R. HAMILTON: 24.
asked the Parliamentary Secretary to the Overseas Trade Department the number of barrels, and the value, of cured herrings exported to the Continent of Europe for the six years 1911 to 1913 and 1924 to 1926, respectively, distinguishing the Scotch cure?

Mr. SAMUEL: With the hon. Member's permission I will circulate the full answer in the OFFICIAL REPORT. The short answer is that in 1911 the total exports of cured herrings
from the United Kingdom were £3,600,000 in 1926 £3,900,000 plus the Irish Free State exports for 1926.

Following is the answer:

The following statement shows the total quantities and value of cured or

Year.
Exported from the United Kingdom to the Continent of Europe.
Exported from Scotland to the Continent of Europe.


Quantity.
Value.
Quantity.
Value.







Barrels.
£
Barrels.
£


1911
…
…
…
…
2,580,000
3,598,100
1,427,000*
†


1912
…
…
…
…
2,730,000
3,941,600
1,441,000*
†


1913
…
…
…
…
2,970,000
4,667,400
1,171,000
†


1924†
…
…
…
…
2,220,000
5,106,500
1,118,000
2,385,000


1925†
…
…
…
…
1,590,000
3,774,300
655,000
1,586,000


1926†
…
…
…
…
1,750,000
3,892,300
888,000
1,821,000


* Includes exports from Northumberland.


† Information not available.


† Exports from the United Kingdom exclude direct exports from the Irish Free State in these years.

Since 1912 herrings have been recorded in the Trade Returns of the United Kingdom by cwts. only. These have been converted into barrels at the rate of 2¾ cwts. = 1 barrel.

The particulars of exports from Scotland have been furnished by the Fishery Board for Scotland.

MERCHANDISE MARKS ACT (JAM).

Sir HUGH LUCAS-TOOTH: 48.
asked the President of the Board of Trade whether any application has been made to bring jam manufactured from foreign fruit, whether abroad or in this country, under the Regulations of the Merchandise Marks Act?

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Sir Burton Chadwick): No such application has been received. In any case, I would remind my hon. Friend that no Order-in-Council made under the Merchandise Marks Act, 1926, could apply to jam made in this country from foreign fruit, in view of the provision in Section 10 (4) (c), by virtue of which a sale for the purpose of the Act does not include the sale of any foodstuffs which have undergone a process of cooking, curing or preserving in the United Kingdom.

salted herrings, not canned, exported from the United Kingdom, and from Scotland, respectively, to the Continent of Europe in each of the years specified, so far as the information is available.

IMPORTED EGGS.

Major GLYN: 49.
asked the President of the Board of Trade if, seeing that the value of imported eggs in shell for the six months ending June was £7,219,622, of which the value of eggs from China was £247,377, being a considerable reduction from normal years, he will say from what country has the deficit in eggs been made up; and what is the estimated value and number of eggs from British home supply, from British Dominions, and from foreign countries, respectively, that were bought and consumed in Great Britain in the six months ending June last?

Mr. SAMUEL: The answer is rather long and contains a statistical table. Accordingly with the permission of my hon. and gallant Friend, it will be circulated in the OFFICIAL REPORT.

Major GLYN: Is it the case that the importation of eggs is very largely in the hands of the same trust or organisation that controls the import of meat?

Mr. SAMUEL: I have no knowledge to that effect.

Mr. HARDIE: Have the Government, in view of the large importation of eggs, done anything at all towards making the
production of eggs in this country something that can be undertaken by anyone who cares to take it up, instead of its being in the hands of trusts, as is the case to-day?

Mr. SAMUEL: We produced 1,500,000,000 eggs in this country in six months, against 900,000,000 imported from foreign countries, so I do not think we are doing so badly in regard to producing eggs in this country.

Mr. HARDIE: You are not making up for lost time.

Following is the answer:

Particulars of the imports of eggs in shell from the principal countries in the first six months of 1927 and the two previous years are shown on page 17 of the Accounts of Trade and Navigation for June last. In the imports from some of the "Other Countries" unspecified in the returns, increases have taken place, particularly in the imports from Sweden, Belgium and Latvia.

As regards the second part of the question, the number of eggs produced in Great Britain in the first six months of 1927 is estimated at 1,500,000,000. The average price of eggs at markets in England and Wales, allowing for variations in quantity in different months, in these six months was 1s. 4½d. per dozen. This gives the total value of the production in Great Britain during January-June 1927, as £8½ millions.

As to imports during these six months, the following table gives the quantity and declared value of eggs in shell imported into Great Britain and Northern Ireland.

Quantity.




Great Hundreds.
Value.


Consigned from:

£


British Countries
3,429,259
1,967,636


Foreign Countries
8,933,020
5,251,986


Total Imports
12,362,279
7,219,622


Re-exported
10,962
7,701


Total retained
12,351,317
7,211,921


Great Hundred =120 eggs.

BELGIAN COTTON YARN (IMPORTS).

Dr. VERNON DAVIES: 51.
asked the President of the Board of Trade if he will give the weight and values of the imports of cotton yarn from Belgium for
the last 12 months for which statistic are available; and can he state the amount of the subsidy per pound of yarn paid by the Belgian Government?

Mr. SAMUEL: Cotton yarn, 4,000,000. lbs. in quantity valued at £340,000, was imported into the United Kingdom, consigned from Belgium, in the year 1926. The latest information in my possession is that no subsidy is paid by the Belgian Government on the production or exportation of cotton yarn.

Oral Answers to Questions — AGRICULTURE.

FOOT-AND-MOUTH DISEASE (STAFFORDSHIRE).

Colonel DAY: 27.
asked the Minister of Agriculture the number of cases of foot-and-mouth disease that have been notified from the Staffordshire district, and the number of cattle slaughtered in consequence?

The MINISTER of AGRICULTURE (Mr. Guinness): Two outbreaks of foot-and-mouth disease have been confirmed on adjacent premises near Tamworth, Staffordshire, on the 7th and 10th of July. Thirty-seven cattle and one pig were slaughtered in consequence.

Colonel DAY: Will the right hon. Gentleman say what area has been proclaimed in the affected district?

Mr. GUINNESS: I shall be glad to send on the details to the hon. Member.

SMALL HOLDINGS (NORTH WALES).

Sir R. THOMAS: 28.
asked the Minister of Agriculture the number of smallholders in the six counties of North Wales; whether the number for the 12 months ending 30th June last shows an increase or a decrease as compared with that for the 12 months ending 30th June, 1926; and whether he will give a comparative return of the rents charged for these small holdings for the same two years?

Mr. GUINNESS: I assume that the hon. Baronet refers to statutory small holdings. The answer contains a great many figures, and with the hon. Baronet's permission, I propose to circulate a tabular statement in the OFFICIAL REPORT.

following is the statement:

The following statement shows the number of statutory smallholders and the total annual rent-roll in the respective

—
30th June, 1926.
30th June, 1927.


Number of Smallholders.
Annual Rent-Roll.
Numer of Smallholders.
Annual Rent-Roll.







£

£


Anglesey
…
…
…
241
9,583
240
9,532


Carnarvon
…
…
…
92
3,405
92
3,417


Denbigh
…
…
…
280
9,578
268
9,237


Flint
…
…
…
156
8,195
153
7,971


Merioneth
…
…
…
132
3,327
132
3,298


Montgomery
…
…
…
255
10,106
255
10,106


Total
…
…
…
1,156
44,194
1,140
43,561

MILK SUPPLIES.

Major GLYN: 29.
asked the Minister of Agriculture what is the estimated daily consumption of fresh and tinned milk in Great Britain respectively; what proportion of the fresh milk is distributed by the large dairy companies; how much through the agency of co-operative retail societies; and what proportion of the daily supply is either Grade A or certified?

Mr. GUINNESS: As the reply is rather long, I propose, with my hon. and gallant Friend's permission, to circulate it in the OFFICIAL REPORT.

Following is the reply:

Until the results of the Scottish Agricultural Census and of the Industrial Census of Production for Dairy Produce are available any figures as to the consumption of fresh milk in this country can only be very approximate. It is estimated, however, that the average daily consumption of fresh milk in Great Britain is probably between 2¼ and 2½ million gallons, and of imported tinned milk (used as liquid and for other purposes) about 6,500 cwt., or the equivalent of 210,000 gallons of liquid milk. With regard to the second and third parts of the question, I understand that in the larger towns and cities, from 12 to 15 individual firms, including retail cooperative societies, handle, as a rule, the bulk of the milk supplies, but I have no

counties in North Wales on the 30th June 1926, and the 30th June, 1927, respectively:

precise information for the country as a whole as to the proportion handled by what my hon. and gallant Friend calls "the large dairy companies" or by the "co-operative retail societies." It is estimated that "Certified" and "Grade A" milk (including Tuberculin Tested Milk) account for about 1 per cent. of the fresh milk consumed.

INQUIRY.

Sir WILLIAM LANE MITCHELL (for Mr. FOOT MITCHELL): 47.
asked the Prime Minister whether he will consider the desirability of instituting an emergency inquiry into the depression in agriculture?

The PRIME MINISTER (Mr. Baldwin): I would refer my hon. Friend to the reply which I gave on 28th June in answer to a question by my hon. Friend the Member for Penrith and Cocker-mouth (Mr. Dixey).

VISAS.

Sir MARTIN CONWAY: 31.
asked the Secretary of State for Foreign Affairs whether, seeing that visas have now been abolished for travellers between Germany and the United States, he will consider the desirability of acceding to the willingness of Germany for a similar action to be taken in the interest of British travellers?

The SECRETARY of STATE for FOREIGN AFFAIRS (Sir Austen Chamberlain): Negotiations are in progress with the German Government.

RUMANO-HUNGARIAN MIXED ARBITRAL TRIBUNAL.

Sir ROBERT GOWER: 32.
asked the Secretary of State for Foreign Affairs whether he is aware that the Rumano-Hungarian Mixed Arbitral Tribunal on 10th January of this year delivered a considered judgment declaring itself to be competent to entertain cases brought before it by certain Hungarian nationals against the Rumanian Government, and that later the Council of the League of Nations appointed a committee to consider the question upon which the tribunal had given its judgment; by what authority such committee was appointed; and whether he will instruct the British delegate at the next session of the Council of the League to raise the question of the competence of the Council, or of a committee appointed by it, to question or review the findings of a tribunal established by international treaty?

Sir A. CHAMBERLAIN: My hon. Friend would appear to be under a misapprehension. He will find full information as to the occasion of the Council's intervention and its action on page 6 of Command Paper 2894 of 1927, of which I am sending him a copy.

Oral Answers to Questions — CHINA.

BRITISH TRADE.

Mr. LOOKER: 33.
asked the Secretary of State for Foreign Affairs the policy of His Majesty's Government as regards the maintenance or otherwise of British trade in the Yangtse region under existing conditions; and whether it is proposed to take any and, if so, what steps in the matter?

Sir A. CHAMBERLAIN: The arrangements made with regard to the return of British residents to Hankow and the Lower Yangtse ports were stated in the reply given to my hon. Friend the Member for Wimbledon (Sir J. Power) on the 15th of June. At the end of May a consular officer was sent to Ichang, on a warship, to investigate the possi-
bility of a resumption of British residence and trade at that port, but found that conditions there were such as to prevent an immediate re-opening of trade and to render residence risky and undesirable. Arrangements have been made for a further investigation next month, when the state of the river will be most favourable for an extension of the investigations to Chungking and Changsha. In the meantime the situation at the Yangtse ports above Hankow is being constantly watched with a view to ascertaining whether conditions there have so far improved as to render them safe for British residents and trade.

Mr. LOOKER: Is it the policy of the Government under present conditions to confine all trade in this region to Shanghai?

Sir A. CHAMBERLAIN: No, Sir. The policy of the Government would be better defined by saying that its object is to protect British lives in the first instance and preserve British trade in the second instance.

Mr. LOOKER: 35.
asked the Secretary of State for Foreign Affairs whether his attention has been drawn to the memorandum submitted to His Majesty's Minister in China on his recent visit to Shanghai by the British firms engaged in the distribution for sale and the collection for export of goods; and whether he is prepared to take action on the lines indicated in this memorandum?

Sir A. CHAMBERLAIN: The memorandum referred to has been forwarded to me by His Majesty's Minister. The importance of the distribution of British goods in the interior of China, and of the collection in the interior of goods for export to destinations in the British Empire, is fully reeognised by His Majesty's Government, who are prepared to consider any means which will effectively promote this end.

TIENTSIN.

Mr. LOOKER: 34.
asked the Secretary of State for Foreign Affairs whether he is now in a position to state the attitude of His Majesty's Government to the question of the negotiations regarding the future status of Tientsin?

Sir A. CHAMBERLAIN: I can add nothing at present to the reply given to my hon. Friend on the 15th of June last.

Mr. LOOKER: Can the Foreign Secretary state whether the preliminary heads of agreement which have been initialled included provision for the resumption of British municipal control if the agreement is not effectively carried out by the Chinese?

Sir A. CHAMBERLAIN: No, Sir. I have told my hon. Friend that I cannot add anything to the information which I have already given.

Mr. WARDLAW-MILNE: Can the right hon. Gentleman give any further information with regard to the negotiations, and can he say if the commercial interests of Tientsin are being consulted or their advice taken?

Sir A. CHAMBERLAIN: If my hon. Friend will look back to the last question, he will see that his point has been already dealt with.

BRITISH TROOPS.

Sir ROBERT SANDERS: 58.
asked the Secretary of State for War whether when the two battalions of the brigade of Guards, now stationed in China, come home, he will consider the expediency of sending them home through Canada?

The FINANCIAL SECRETARY to the WAR OFFICE (Commodore Douglas King): Consideration is being given to the suggestion.

Mr. LOOKER: Will my hon. and gallant Friend also consider the desirability of not sending them through Canada in the height of the winter or in the height of the summer?

Commodore KING: All relevant considerations will be taken into account.

Mr. HURD: Is my hon. and gallant Friend aware that it is a very comfortable journey either in winter or in summer?

S.S. "LOWTHER RANGE."

Mr. THURTLE: 40.
asked the First Lord of the Admiralty whether he has in his Department any information as to the circumstances in which the ships of Von Spee's squadron obtained coal from the s.s. "Lowther Range" during the War; and whether any action was taken against the owners of this vessel?

The PARLIAMENTARY SECRETARY to the ADMIRALTY (Lieut.-Colonel Headlam): I should be glad if the hon. Member would repeat this question next week.

NAVAL ARMAMENTS.

Sir FREDRIC WISE: 41.
asked the First Lord of the Admiralty the number of capital ships in 1913 and in 1927?

Lieut.-Colonel HEADLAM: The figures are as follow:


31ST DECEMBER, 1913.


—
Built.
Building.
Total.


Battleships
58
14
72


Battle Cruisers
9
1
10





82




1ST JULY, 1927.


—
Built.
Building.
Total.


Battleships
14
2
16


Battle Cruisers
4
—
4





20

Mr. KELLY (for Lieut.-Commander KENWORTHY): 38.
asked the First Lord of the Admiralty what was the greatest total number of armed vessels-of-war under British and Allied flags engaged in anti-submarine operations, including the escort of convoys, the patrol of trade routes and other areas, and in mine-sweeping and mine-laying, at any one time, or during any one week or other convenient period during the late War; what was this date; what were the sinkings of Allied and British merchant ships during that particular week; and what was the greatest total tonnage of British and Allied merchant ships sunk during any one week during the late War?

Lieut.-Colonel HEADLAM: The greatest total numbers of armed vessels-of-war engaged at one time in the anti-sub- marine operations indicated were British, 3,971, and Allied, approximately, 1,550. The comparable figures for minesweeping and minelaying were: British, 935, and Allied, approximately, 350. The figures are for the month of October,
1918. During that month, 59,229 tons of British and 41,308 tons of Allied merchant shipping were sunk by enemy surface vessels, submarines and mines. The week in which the heaviest total losses were incurred in merchant shipping was that ending on 29th April, 1917, the figures being:




Tons.


British
…
172,209


Allied and Neutral
…
67,045


Total
…
239,254

Sir WILLIAM DAVISON: Can the hon. and gallant Gentleman say how these figures compare with the figures that are being presented by the First Lord at Geneva?

Lieut.-Colonel HEADLAM: No, I am not prepared to do that.

TONNAGE of British Merchant Ships lost by Enemy
Action during the War.


—
By T.Bs., Cruisers, &c.
By Submarines.
By Mines.
By Aircraft.
Total.


Merchant Ships
…
…
442,702
6,635,059
673,417
7,912
7,759,090


Fishing Vessels
…
…
5,637
57,583
8,545
Nil
71,765


Total
…
…
448,339
6,692,642
681,962
7,912
7,830,855

Mr. KELLY (for Lieut.-Commander KENWORTHY): 37.
asked the First Lord of the Admiralty what was the greatest number of cruisers, British and Allied, respectively, engaged in the protection of commerce, as distinct from work with the main battle fleets, at any one time during the late War?

Lieut.-Colonel HEADLAM: The numbers are:


British cruisers
62


Cruisers of Allied and associated
Powers
52


In addition to these numbers the four cruisers attached to the Mediterranean Fleet were employed in the protection of trade, and a considerable number of the older battleships were also employed for this purpose.

PARKS AND OPEN SPACES (LITTER).

Mr. CAMPBELL: 43.
asked the Minister of Health whether his attention has been called to the large amount of litter left

MERCANILE MARINE (WAR LOSSES).

Mr. KELLY (for Lieut.-Commander KENWORTHY): 36.
asked the First Lord of the Admiralty what was the total British merchant-ship tonnage lost during the Great War by the action of enemy cruisers, enemy submarines, moored and floating mines, and other causes, respectively, but not including merchant ships seized in enemy ports on the outbreak of War?

Lieut.-Colonel HEADLAM: The total British merchant-ship tonnage lost during the War, by the enemy action specified, amounted to 7,830,855 tons. The particulars have been collected in the form of a table, which, with the hon. and gallant Member's permission, I will circulate in the OFFICIAL REPORT.

Following is the table:

in parks and other public open spaces after every holiday; from what local authorities he has recently received draft by-laws dealing with this nuisance; and whether such by-laws have in all cases been confirmed?

The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Sir Kingsley Wood): My right hon. Friend's attention has been called to this matter. By-laws have been confirmed for the town councils of Birmingham and Richmond (Surrey) and the urban district council of Bexley. By-laws submitted by the urban district council of Dartford, the parish council of Great Missenden, and the trustees of the Alexandra Palace are now under consideration. My right hon. Friend will be fully prepared to consider any proposals for by-laws put before him by other local authorities. I may add that, where Section 81 of the Public Health Acts Amendment Act, 1907, is in force, it is an offence to deposit litter or rubbish in a recreation ground under the control of a local authority.

Mr. HURD: Has the London County Council made any approaches in this matter in view of the many parks we have in London where this litter abounds?

Sir K. WOOD: I must have notice of that question.

Mr. HARRIS: Will the Minister of Health consider publishing the appeal made by His Majesty last year at High-gate on this matter which would have a great effect?

Sir W. DAVISON: Will the Parliamentary Secretary consider the possibility of circularising the local authorities in London who have not made up their minds as to the desirability of doing so, and possibly His Majesty's appeal might be sent with the Circular.

Sir K. WOOD: I will consider both those matters.

CONTRIBUTORY PENSIONS ACT.

Mr. W. THORNE: 44.
asked the Minister of Health why branch secretaries of trade unions are debarred from signing forms in connection with applications for widows' pensions under the Widows', Orphans', and Old Age Contributory Pensions Act?

Sir K. WOOD: This matter was under consideration recently, with the result that, in the latest print of the application form, branch secretaries of trade unions are included in the list of persons who are authorised to sign the forms.

Mr. BUCHANAN: Can the hon. Gentleman say why it is that a Member of Parliament is, perhaps, the only member of the public who is not allowed to sign these forms?

Sir K. WOOD: I did not know that that was so; I will make inquiries.

FRANCHISE.

Sir PATRICK FORD: 45.
asked the Prime Minister whether he intends to introduce legislation for equalising the franchise as between men and women during the Autumn Session?

The PRIME MINISTER: No, Sir.

SOMERSET COLLIERIES (WHEELLESS TUBS).

Mr. WHITELEY: 46.
asked the Prime Minister whether he has yet set up a Committee to deal with the use of wheel-less tubs in the Somerset coalfields; if so, whether he is in a position to give the names of those serving on the Committee; and whether a Report giving their findings will be circulated for the information of Members?

The SECRETARY for MINES (Colonel Lane Fox): I have been asked to reply. I hope to be in a position to announce to-morrow the appointment of this Committee. The findings of the Committee will certainly be made available for the information of Members.

STRANRAER INDUSTRIAL REFORMATORY.

Mr. BUCHANAN: 53.
asked the Secretary of State for Scotland the weekly cost of keeping a lad at, the Stranraer Industrial Reformatory?

The SOLICITOR-GENERAL for SCOTLAND (Mr. MacRobert): The average cost of maintenance (including training) in Stranraer Reformatory School during the year ended 31st March, 1927, was 36s. 6d. per head per week.

Mr. HARDIE: Does that 36s. 6d. spent per week for each boy in the reformatory include the sum that he is allowed when he leaves?

The SOLICITOR-GENERAL for SCOTLAND: I should require notice of that question.

Mr. BUCHANAN: Will the hon. and learned Gentleman make representations to the proper quarter that the Government should spend one-third of this sum on reforming boys before they become bad, instead of spending a large sum after the boys have actually become criminals?

MERCHANT SHIPPING (STATISTICS).

Mr. BUCHANAN: 50.
asked the President of the Board of Trade the number of ships cleared at the various ports in this country during the past year; the number in 1924 and in 1922; and the num-
ber of inspectors employed under the Merchant Shipping Acts to certify as to the proper seaworthiness of the ships?

Sir B. CHADWICK: The answer takes the form of a table of figures, with notes;

Numbers of Trading Vessels leaving all Ports in the United
Kingdom.


—
1922.
1924.
1926.


British Vessels—









Foreign Trade
…
…
…
…
40,746
55,716
51,823


Coasting Trade
…
…
…
…
189,450
174,965
141,164


Foreign Vessels—









Foreign Trade
…
…
…
…
34,654
38,199
34,024


Coasting Trade
…
…
…
…
5,337
7,482
3,385


Total
…
…
…
…
270,187
270,362
230,396


NOTES.


The figures for 1924 and 1926 are exclusive, and those for 1922 inclusive, of the numbers of vessels that left ports in Southern Ireland in those years. The movements between ports in Southern Ireland and other ports in the British Isles are included in the figures given above for Coasting Trade in 1922, and in those for Foreign Trade for 1924 and 1926.

With reference to the second part of the question, the number of officers in the Marine Survey staff of the Board of Trade in the years 1922, 1924 and 1926 was 212, 196 and 193 respectively.

Oral Answers to Questions — EDUCATION.

SCHOOL CLINIC, EAST HULL.

Mr. LUMLEY: asked the President of the Board of Education if he has sanctioned the proposal of the Hull Education Committee to establish a child welfare and school clinic in East Hall?

The PRESIDENT of the BOARD of EDUCATION (Lord Eustace Percy): This proposal, which was only submitted on the 1st July is under consideration by the Departments concerned.

COOKERY INSTRUCTION.

Mr. HARRIS: 57.
asked the President of the Board of Education how far the teaching of cookery is compulsory in elementary schools; and what education authorities make special provision for it by trained instructors and special cookery centres?

Lord E. PERCY: I would refer the hon. Member to Article 4 of the Code

and, with the hon. Member's permission, I will circulate it in the OFFICIAL REPORT.

Following is the answer;

The following table gives the information asked for in the first part of the question:

of Regulations for Public Elementary Schools. It is, of course, generally recognised that, wherever possible, practical instruction in domestic subjects, including cookery, should be given to the older girls in elementary schools, and, according to the latest available returns, all local authorities except five make provision for instruction in cookery.

Mr. HARRIS: Will the Noble Lord bring pressure to bear on those five to give the necessary instruction, so that it may become universal throughout the country?

Lord E. PERCY: I do not know which are the five.

SAFEGUARDING DUTIES (REVENUE).

Mr. HARRIS: 60.
asked the Chancellor of the Exchequer what is the revenue derived during the last financial year from safeguarding duties from lace, gas mantles, cutlery, gloves and other safeguarding duties, respectively?

The FINANCIAL SECRETARY to the TREASURY (Mr. Ronald McNeill): The net revenue derived from the
several safeguarding duties during 1926–27 was as follows:



£


Lace and embroidery
220,537


Mantles for incandescent lighting
11,031


Cutlery
76,775


Gloves
608,441


Packing or Wrapping Paper
494,851


Key Industry Goods
505,323


Total
1,916,958

Mr. HARRIS: Does the right hon. Gentleman regard key industries as coming under the category of safeguarding duties?

Mr. McNEILL: I think that is so; it says so in the Act.

HIS MAJESTY'S STATIONERY OFFICE (TYPEWRITERS).

Colonel DAY: 61.
asked the Financial Secretary to the Treasury whether any typewriters of foreign manufacture have been purchased by the Stationery Office since November, 1918?

Mr. McNEILL: Yes, Sir.

Colonel DAY: Can the right hon. Gentleman say what typewriters have been purchased from America since 1918?

Mr. McNEILL: From America?

Colonel DAY: From anywhere abroad?

HON. MEMBERS: Buy British goods!

Mr. McNEILL: I do not know exactly what the hon. Gentleman means by foreign typewriters. If he wishes to know of what makes the typewriters were, I can give him that information if he will put down a question.

Lieut.-Colonel Sir FREDERICK HALL: Does my right hon. Friend appreciate the value of this question as coming from the Labour benches? Does it not show that hon. Members on those benches recognise that British industry should be protected?

Colonel DAY: Is the right hon. Gentleman aware that, while foreign typewriters have been purchased by Government Departments, British typewriters [...] well be produced which will [...] good work?
[...] Certain types of type[...]-which are not made [...]

Oral Answers to Questions — TRANSPORT.

CLASSIFIED ROADS (PAYMENTS).

Mr. REMER: 62.
asked the Minister of Transport why cheques for classified roads are sent through county councils; if he is aware that this method of working causes increased expenditure in both national and local administration; and if he will take steps to see that this method is altered?

The MINISTER of TRANSPORT (Colonel Ashley): The bulk of the classified roads are main roads for which the county council are financially responsible, or district roads towards the maintenance of which they contribute. It has, therefore, been found a convenient procedure to make all payments through the same channel. I am not aware that this has given rise to increased expenditure, and I see no reason to make any alteration in the procedure.

Mr. REMER: Is the Minister aware that certain rural roads, when corners on them have to be dealt with, are immediately put under the county council after they have been classified in that way, and that that puts the local authorities to considerable trouble and inconvenience?

Colonel ASHLEY: I am aware, of course, of the fact stated by my hon. Friend, but I am also aware that in the great majority of the cases which go through the county councils that is found to be the most convenient way.

Mr. REMER: Will the Minister get into touch with the various local authorities on this matter, and try to find a means of effecting economy in this way?

Colonel ASHLEY: Certainly, if my hon. Friend will give me instances, I shall be most happy to do so.

Mr. LAMB: Is it not a fact that all of these so-called rural roads are very largely used by the general public while motoring?

Colonel ASHLEY: That is so.

RAILWAY TRAVELLING FACILITIES (SUNDAYS).

Mr. THURTLE: 63.
asked the Minister of Transport if he is prepared to introduce legislation with a view to obtaining for the public improved facilities for rail-
way travel on Sundays, especially in connection with short journeys, in view of the fact that Sunday is becoming the chief day of recreation for many people?

Colonel ASHLEY: Under the existing law railway companies are under a general obligation to afford reasonable services and facilities, and I do not contemplate the introduction of legislation dealing specially with the facilities to be afforded on Sundays.

Mr. THURTLE: Is the right hon. Gentleman aware that, since a more rational view has been taken of the observance of Sunday, there has been a public demand for a better railway service on Sundays?

Colonel ASHLEY: If the railway companies do not afford reasonable facilities, it is open to anyone to apply to the Railway and Canal Commission to see that such facilities are granted.

Mr. THURTLE: Would the right hon. Gentleman define what he means by "reasonable"?

Colonel ASHLEY: That is a matter for the Tribunal, not for myself.

Mr. J. H. THOMAS: Would not there be reasonable facilities if there were empty seats on Sundays now?

PICCADILLY (ROAD REPAIRS).

Sir NICHOLAS GRATTAN-DOYLE: 64.
asked the Minister of Transport whether a decision has been arrived at to close Piccadilly to traffic in the near future; if so, on what date; what is the probable duration of the stoppage; whether the business interests have been consulted in this matter; and whether he has considered the possibility of using this thoroughfare as a one-way street during the period of the proposed repairs so as to mitigate the loss to the business community?

Colonel ASHLEY: Piccadilly has not been resurfaced for about 15 years, and the work has now become a question of urgency. Under a carefully thought out plan, work will commence on 25th July, when the volume of traffic is diminishing and at a time when the weather conditions are normally good. The Westminster City Council have arranged that the work shall be done in sections, and that all the sections should be completed
within a period of two to three months. The business interests concerned have been notified of the council's proposals. The Post Office, the Metropolitan Water Board, and certain electric light and gas companies require at the same time to carry out extensive works on their own account. The possibility of carrying out the work in half-widths has been carefully considered, but in view of the magnitude of the operations, the engineering difficulties, and the delay in completion that would be involved, it has been decided that such a course is impracticable, and would not be in the interests of traffic nor, in my opinion, would it be in the interests of the traders themselves. I would add that the Westminster City Council and all the undertakers concerned have agreed to work day and night while the work is in progress.

Sir N. GRATTAN-DOYLE: Can the right hon. Gentleman give any guarantee that the work will be finished in two or three months, or three months at the outside?

Colonel ASHLEY: No. But I can give a guarantee that it will be done as quickly as possible. The only cessation of work in the 24 hours will be where there are houses where people are sleeping.

Sir N. GRATTAN-DOYLE: Can the right hon. Gentleman give a guarantee that it will not exceed four months?

Colonel ASHLEY: I think I had better be put in the witness box and cross-examined.

Sir F. HALL: Considering the large number of unemployed, would it not be possible to increase the number working on it, so as to reduce the time in which the work will be carried out?

Colonel ASHLEY: All the men who can be usefully employed will be employed.

Mr. H. WILLIAMS: Would it not be more economical in the long run to employ sufficient men, so that all sections may proceed simultaneously?

Colonel ASHLEY: No, I [...] this The difficulty of dealing with and[...] closing such a[...] very great indeed,[...] able.

Mr. W. THORNE: Will the work be carried on in two 12-hour shifts or three eight-hour shifts?

Colonel ASHLEY: I must have notice of that question.

Brigadier-General CLIFTON BROWN: How much money has been earmarked from the Road Fund for the purpose?

Colonel ASHLEY: I think it is carried on entirely at the expense of the West-minister City Council, with a classification grant.

UNEMPLOYMENT (AGRICULTURAL LABOURERS).

Mr. BUCHANAN (for Mr. STEPHEN): 54.
asked, the Minister of Labour whether he proposes to include agricultural workers within the scope of the new Unemployment Insurance Bill which he proposes to introduce?

The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Mr. Betterton): No, Sir.

FRANCE (COAL IMPORTS, LICENCES).

Mr. E. BROWN: 25.
asked the Parliamentary Secretary to the Overseas Trade Department if he has any further statement to make with reference to the French embargo on imported coal; and if he will give shippers and exporters any information as to the working of the licence scheme after the month of August?

Mr. SAMUEL: The French Minister of Public Works has recently emphasised in a public speech the limited nature of the restriction and its temporary character. We have no information at present as to the course to be pursued after August next.

S.S. "PLUTARCH" (PLAGUE- INFECTED RATS).

Mr. WHITELEY (for Mr. B.: can eq [...] asked the Minister of do equally [...] he is aware that a

Mr. McNEILL: Caught to the eastern writers are required [...]ia Dock in the s.s. in this country.

"Plutarch" was found to be overrun by vermin infected with bubonic plague; and, in view of the fact that the grain has been distributed to numerous districts, what steps has he taken to prevent the spread of the infection?

Sir K. WOOD: My right hon. Friend is aware that plague-infected rats were found on this ship. The Port Sanitary Authority are responsible for the measures taken to prevent the spread of infection; and my right hon. Friend is informed that when the presence of infected rats was discovered these measures included the mooring of the vessel in the middle of the dock and its fumigation for the destruction of the rats. The unloading of the vessel was subsequently completed under the supervision of the officers of the Port Sanitary Authority. My right hon. Friend is advised that there should be no risk of plague infection from the grain.

Oral Answers to Questions — SELECTION (STANDING COMMITTEES).

STANDING COMMITTEE A.

Sir K. WOOD: Mr. WILLIAM NICHOLSON reported from the Committee of Selection; That they had discharged the following Members from Standing Committee A: Mr. Smedley Crooke, Mr. George Harvey, and Major Steel; and had appointed in substitution: Lord Fermoy, Sir Clement Kinloch-Cooke, and Mr. Shepperson.

Mr. WILLIAM NICHOLSON: further reported from the Committee; That they had discharged the following Member from Standing Committee A (added in respect of the Road Transport Lighting Bill): Captain Brass; and had appointed in substitution: Colonel Vaughan-Morgan.

Reports to lie upon the Table.

MESSAGE FROM THE LORDS.

That they have agreed to—

Grimsby Corporation Bill,
Greenock Burgh Extension, &c., Bill,
London County Council (Money) Bill,
Newcastle-upon-Tyne Corporation Bill, with Amendments.

That they have passed a Bill, intituled, "An Act to confirm a Provisional Order of the Minister of Health relating to
Sutton Coldfield." [Ministry of Health Provisional Order Confirmation (Sutton Coldfield Extension) Bill [Lords].

Ministry of Health Provisional Order Confirmation (Sutton Coldfield) Extension) Bill [Lords],

Read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 176.]

Companies Bill [Lords],

Read the first time; to be read a second time to-morrow, and to be printed. [Bill 177.]

Orders of the Day — FINANCE BILL.

As amended, considered.

NEW CLAUSE.—(Relief from Super-tax in case of purchases cum dividend.)

If, on an application made by any individual, either at the time of making his return for the purposes of Super-tax for any year or within the time limited for appealing against the assessment upon him to Super-tax for that year, the applicant proves to the satisfaction of the Special Commissioners that, in consequence of the sale or transfer to him of any assets, The amount of Super-tax payable by him for that year exceeds by more than ten per cent. the amount of the Super-tax which would have been payable by him for that year if the income from those assets and from any assets sold or transferred by him were deemed to have accrued from day to day, then, for the purposes of any assessment to Super-tax in the case of that individual for that year, the income from all such assets as aforesaid shall be deemed to have accrued from day to day and to have been received by him as and when it is deemed to have accrued.—[Mr. Churchill.]

Brought up, and read the First time.

Motion made, and Question proposed, "That the Clause be read a Second time."—[Mr. Churchill.]

Mr. WILLIAM GRAHAM: I think it it only fair to the House that the right hon. Gentleman should give some explanation of the Clause?

The CHANCELLOR of the EXCHEQUER (Mr. Churchill): This Clause, like most of those we are discussing to-day, certainly like all those the Government are discussing, partakes of the nature of a concession to the taxpayer. The object is to make our treatment of the question of sales ex and cum dividend even handed. The old Clause 31, which has now become 33, prescribes that in certain circumstances the Treasury shall have the right to collect Super-tax on sales cum dividend, but it was thought right at the same time to move the counter-part, namely that the taxpayer should have redress in cases where there was an exceptional purchasing of stock cum dividend. In no case is the matter material unless either on the one hand there is an avoidance of Super-tax in any given year on the balance to an extent of more than 10 per cent. by sales cum dividend, or on the other, as in this new
Clause, unless there is an extra burden thrown on the taxpayer of more than 10 per cent. in a given year through a balance of purchases cum dividend. We do not anticipate that any large number of claims for relief under the Clause will arise, but relief will be available whenever the taxpayer, in the proper exercise of his own affairs, may have purchased cum dividend on such a scale as to increase his Super-tax liability by the 10 per cent. indicated above. It does not go quite so far as the Clause moved by the hon. Member for Putney (Mr. S. Samuel). His Clause would have given relief from Super-tax by reference to the sole circumstance that the taxpayer has, in the course of the year of assessment, acquired a single holding of shares cum dividend, quite regardless of the fact that the same taxpayer in the same year might have sold other shares cum dividend. The original Clause 31 sought to restrict the practice of evading taxation by systematic sales cum-dividend, and we balance it by this redress to the taxpayer when, in the ordinary course, he has purchased cum-dividend to a similar extent. Therefore, the whole of this Clause, as of Clause 31, of which it is a counterpart, lies in an extremely restricted and exceptional sphere. Its usefulness will not often be called into play, but we believe that Clause 31, or Clause 33 as it now is, will certainly to a very large extent, if not entirely, stop the leakage in the revenue which has occurred from systematic sales cum-dividend, and we have balanced it at the same time by this new Clause, which secures the taxpayer in the event of his general transactions for the year having led to an extra burden of Super-tax exceeding 10 per cent. in consequence of his net purchases cum-dividend.

Mr. W. GRAHAM: The explanation which the Chancellor of the Exchequer has offered to the House is a reminder, of course, of the difficulty of dealing with matters of this kind on the Report stage or indeed on any stage of the Bill. But I think it will be quite impossible for us to agree on this side of the House that what we are doing here is to balance the two sides of one and the same problem. As I understand the Chancellor of the Exchequer's explanation, in the case of the purchasers of those shares, the steps he is taking
are to make certain that they are not called upon in any one year for Super-tax to the extent beyond which they are strictly liable. That is, if they can show to the Special Commissioners that their liability will be 10 per cent. greater than if the income had accrued from day to day, then they are entitled to relief under this Clause. May I make it perfectly plain that on that part of the proposition we on this side of the House can hardly object, because, after all, so long as we have Income Tax and Super-tax at all in this country we must not ask from the taxpayers more than they are strictly liable to pay under the legislation in force. We must not do anything unfair or unjust, and, accordingly, if we want to reduce this problem to the most accurate possible terms, then in this part of our discussion this afternoon the accrual from day to day would be a proper basis.

Mr. CHURCHILL: indicated assent.

Mr. W. GRAHAM: It is, of course, the idea of the right hon. Gentleman's Clause, but he proceeds to anticipate a little and to refer to a new Clause 33, or rather to the old Clause 31, now numbered 33 on the Paper. While I should be out of order in discussing that Clause at this stage, I ought to reply to the right hon. Member's suggestion that you are here dealing with two sides of one problem. In point of fact, what you are doing in this Clause is to avoid calling upon the Super-tax-payer for something for which, in a very strict reading of Income Tax and Super-tax in this country, he is not liable. But the problem with which you are dealing in Clause 33 is something entirely different. You are there dealing, at a later stage, with the question of evasion, and, as we shall see at that later period of our discussion, the relief is given if the evasion does not go beyond 10 per cent. of the Super-tax for which he is liable within the year. All I want to do at this stage is to say that we on this side of the House cannot take exception to the present proposals of the Chancellor of the Exchequer, but we shall offer the very strongest exception later to any proposal which seeks to get rid of the difficulty of evasion merely because it is put on a 10 per cent. basis. With that we cannot for a moment agree, and
accordingly we take a different view from the right hon. Gentleman that what we have before us are merely two parts of one problem. To us they are different. We support this proposal. We shall oppose the second and later idea of the right hon. Gentleman.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

New CLAUSE.—(Provision as to Stamp Duty on Powers of Attorney.)

No instrument chargeable with stamp duty under the heading "Letter or Power of Attorney, and Commission, Factory, Mandate, or other instrument in the nature thereof" in the First Schedule to The Stamp Act, 1891, shall be charged with duty more than once by reason only that more persons than one are named in the instrument as donors or donees (whether jointly, severally, or otherwise), of the powers, thereby conferred or that those powers relate to more than one matter.—[Mr. Churchill.]

Brought up, and read the First time.

Motion made, and Question proposed, "That the Clause be read a Second time."—[Mr. Churchill.]

Mr. W. GRAHAM: May we again have some explanation, and particularly will the right hon. Gentleman tell us what the cost to the Exchequer, if that can be measured, will be in respect of the Clause which he now proposes?

Mr. CHURCHILL: The new Clause has been put down to meet to a very large extent and in some respects to an even greater extent what was asked for in the Amendment moved by my hon. Friend the Member for Cambridge University (Mr. Withers). We promised the hon. Gentleman on the Committee stage that we would take this action. The. Clause is primarily designed to meet a point of doubt and occasional difficulty which arises in connection with the assessment of Stamp Duty on Powers of Attorney by which a number of persons are appointed to act. That, I think, briefly, is the effect of it. I do not think it will be advantageous to go into it in great detail, although I should be prepared to do so. The Clause, as now drafted, carries out fully the intention which animated the hon. Member for Cambridge University in his proposal, and in one respect it is more generous than his proposal. The amount
of duty involved is quite inconsiderable. We do not consider that the revenue will be prejudicially affected in any appreciable way or that it need be a factor in the decision to which the House has now to come. The proposals put forward are designed to meet the promise made in Committee, and I trust they will be assented to by the House.

Mr. GRAHAM: I wish to say only a word or two on this Clause. The previous speech having been designed to secure the explanation of the Chancellor of the Exchequer, I would say again that it would be unreasonable to offer any objection. I remember the discussion which took place on a previous occasion. We are told that very little revenue is involved here, and, in any case, on impartial view, it is unfair to duplicate the Stamp Duty in cases of this kind, so that from this side of the House we have no objection whatever to this Clause.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Relief from capital and transfer stamp duty in case of reconstructions or amalgamations of companies.)

(1) If in connection with a scheme for the reconstruction of any company or companies or the amalgamation of any companies it is shown to the satisfaction of the Commissioners of Inland Revenue that there exist the following conditions, that is to say—

(a) that a company with limited liability is to be registered, or that since the commencement of this Act a company has been incorporated by letters patent or Act of Parliament, or the nominal share capital of a company has been increased;
(b) that the company (in this section referred to as "the transferee company") is to be registered, or has been incorporated, or has increased its capital with a view to the acquisition either of the undertaking of, or of not less than ninety per cent. of the issued share capital of, any particular existing company;
(c) that the consideration for the acquisition (except such part thereof as consists in the transfer to or discharge by the transferee company of liabilities of the existing company) consists as to not less than ninety per cent. thereof—

(i) where an undertaking is to be acquired, in the issue of shares in the transferee company to the existing company or to holders of shares in the existing company; or
48
(ii) where shares are to be acquired, in the issue of shares in the transferee company to the holders of shares in the existing company in exchange for the shares held by them in the existing company;

then, subject to the provisions of this section,—

(A) The nominal share capital of the transferee company, or the amount by which the capital of the transferee company has been increased, as the case may be, shall, for the purpose of computing the stamp duty chargeable in respect of that capital, be treated as being reduced by either—

(i) an amount equal to the amount of the share capital of the existing company in respect of which stamp duty has been paid, or, in the case of the acquisition of a part of an undertaking, equal to such proportion of the said share capital as the value of that part of the undertaking bears to the whole value of the undertaking; or
(ii) the amount to be credited as paid up on the shares to be issued as such consideration as aforesaid,
whichever amount is the less; and

(B) Stamp duty under the heading "Conveyance or Transfer on Sale" in the First Schedule to The Stamp Act, 1891, shall not be chargeable on any instrument made for the purposes of or in connection with the transfer of the undertaking or shares, nor shall any such duty be chargeable under section twelve of The Finance Act, 1895, on a copy of any Act of Parliament, or on any instrument vesting, or relating to the vesting of, the undertaking or shares in the transferee company:

Provided that—

(a) no such instrument shall be deemed to be duly stamped unless either it is stamped with the duty to which it would but for this section be liable or it has in accordance with the provisions of section twelve of The Stamp Act, 1891, been stamped with a particular stamp denoting either that it is not chargeable with any duty or that it is duly stamped; and
(b) in the case of an instrument made for the purposes of or in connection with a transfer to a company within the meaning of the Companies (Consolidation) Act, 1908, the provisions of paragraph (B) of this Sub-section shall not apply unless the instrument is either—

(i) executed within a period of twelve months from the date of the registration of the transferee company or the date of the resolution for the increase of the nominal share capital of the transferee company, as the case may be; or
(ii) made for the purpose of effecting a conveyance or transfer in pursuance of an agreement which has been filed, or particulars of which have been filed, with the registrar of companies within the said period of twelve months.

(2) For the purposes of a claim for exemption under paragraph (B) of Sub-section (1)
of this Section, a company which has, in connection with a scheme of reconstruction or amalgamation, issued any unissued share capital shall be treated as if it had increased its nominal share capital.

(3) A company shall not be deemed to be a particular existing company within the meaning of this Section unless it is provided by the memorandum of association of, or the letters patent or Act incorporating, the transferee company that one of the objects for which the company is established is the acquisition of the undertaking of, or shares in, the existing company, or unless it appears from the resolution Act, or other authority for the increase of the capital of the transferee company that the increase is authorised for the purpose of acquiring the undertaking of or shares in the existing company.

(4) In a case where the undertakings of or shares in two or more companies are to be acquired the amount of the reduction to be allowed under this Section in respect of the stamp duty chargeable in respect of the nominal share capital or the increase of the capital of a company shall be computed separately in relation to each of those companies.

(5) Where a claim is made for exemption under this Section, the Commissioners of Inland Revenue may require the delivery to them of a statutory declaration in such form as they may direct, made in England by a solicitor of the Supreme Court or in Scotland by an enrolled law agent, and of such further evidence, if any, as the Commissioners may reasonably require.

(6) If—

(a) where any claim for exemption from duty under this Section has been allowed, it is subsequently found that any declaration or other evidence furnished in support of the claim was untrue in any material particular, or that the conditions specified in the said Sub-section are not fulfilled in the reconstruction or amalgamation as actually carried out; or
(b) where shares in the transferee company have been issued to the existing company in consideration of the acquisition, the existing company within a period of two years from the date, as the case may be, of the registration or incorporation, or of the authority for the increase of the capital, of the transferee company ceases, otherwise than in consequence of reconstruction, amalgamation, or liquidation, to be the beneficial owner of the shares so issued to it; or
(c) where any such exemption has been allowed in connection with the acquisition by the transferee company of shares in another company, the transferee company within a period of two years from the date of its registration or incorporation or of the authority for the increase of its capital, as the case may be, ceases, otherwise than in consequence of reconstruction, amalgamation, or liquidation, to be the beneficial owner of the shares so acquired;

the exemption shall be deemed not to have been allowed, and an amount equal to the duty remitted shall become payable forthwith, and shall be recoverable from the transferee company as a debt due to His Majesty, together with interest thereon at the rate of five per cent. per annum in the case of duty remitted under paragraph (A) of Sub-section (1) of this Section from the date of the registration or incorporation of the transferee company or the increase of its capital, as the case may be, and in the case of duty remitted under paragraph (B) of the said Sub-section from the date on which it would have become chargeable if this Act had not passed.

(7) If in the case of any scheme of reconstruction or amalgamation the Commissioners of Inland Revenue are satisfied that at the proper time for making a claim for exemption from duty under Sub-section (1) of this Section there were in existence all the necessary conditions for such exemption other than the condition that not less than ninety per cent. of the issued share capital of the existing company would be acquired by the transferee company, the Commissioners may, if it is proved to their satisfaction that not less than ninety per cent. of the issued capital of the existing company has under the scheme been acquired within a period of six months from the earlier of the two following dates, that is to say—

(a) the last day of the period of one month after the first allotment of shares made for the purposes of the acquisition; or
(b) the date on which an invitation was issued to the shareholders of the existing company to accept shares in the transferee company;

and on production of the instruments on which the duty paid has been impressed, direct repayment to be made of such an amount of duty as would have been remitted if the said condition had been originally fulfilled.

(8) In this Section, unless the context otherwise requires—

References to the undertaking of an existing company include references to a part of the undertaking of an existing company:

The expression "shares" includes stock.—[Mr. Churchill.]

Brought up, and read the First time.

Mr. CHURCHILL: I beg to move, "That the Clause be read a Second time."
This is a very formidable Clause on paper. It covers two-and-a-half pages of Orders of the House of Commons, but I hope the House will not be at all alarmed by it, because it is all in the nature of concession. If it were rejected, the revenue would not suffer in the slightest degree. On the contrary, it might mean
adding to it. Other interests, larger and more general, would suffer. The right hon. Member for Colne Valley (Mr. Snowden) made in December last, I think, a very interesting and, if I may say so, a very sagacious speech on amalgamations and combinations, and showed how the old prejudice which attached to such proceedings required very considerable scrutiny and analysis under modern developments. There may be combinations which are entirely for the public advantage, which give more security to the employés, which enable more employment to be given to labour, which give a new service to the public and in every way are a step towards that higher organisation of production and distribution towards which, some by one road and others by another, we are all making our way.
In the Finance Bill, I proposed Clause 48 which facilitated amalgamations by relieving them, under certain conditions, from the liability to Stamp Duty. Careful examination has shown that a number of amalgamations among companies of a particular class would not have been included in the scope of our concession. That is why we have re-written the Clause and made it wider in its scope to cover a number of classes which would otherwise have been excluded. The Clause in its original form followed substantially the recommendations of the Company Law Amendment Committee, which reported in 1926, but those recommendations only dealt with reconstructions or amalgamations of companies registered under the Companies Acts, and the relief conferred by the original Clause was applicable only to classes where the whole of the undertaking or at least 90 per cent. of the shares of the company under the Companies Act were being acquired in consideration of shares in another company which had been registered, or which had increased its capital for the specific purpose of the acquisition. Here are some of the cases which would have been omitted from the scope of the original Clause:

(a) Reconstructions or amalgamations affecting companies incorporated by Act of Parliament or letters patent.
(b) Reconstructions or amalgamations which do not involve the incorporation of
52
a new company or an increase of the nominal capital of the existing company but which are carried out by the issue by the existing company of already authorised share capital on which capital duty had already been paid.
(c) Reconstructions or amalgamations under which a part or parts only of an undertaking or undertakings were being acquired.
(d) Reconstructions or amalgamations in which shares of the absorbing company were to be issued to shareholders of the absorbed company otherwise than in proportion to their existing shareholding, or were to be issued to creditors of the absorbed company in satisfaction of their claims.

These would have constituted a series of cases which would have been left completely outside the scope of our concession, and which we saw no reason for excluding. There is no serious loss of revenue involved. I am not able to estimate what the direct loss of revenue will be, but I am advised that it will not necessitate any alteration of the Budget figures. It is a matter which will balance itself over a course of years. Of this I am quite sure, that if the House as a whole approves of the principles which were involved in the promulgation of the original Clause 48 for facilitating these amalgamations, they will also approve of the wider extension and the greater refinement with which this particular new Clause now deals.

Mr. SNOWDEN: I do not think this is an occasion when we should enter into a lengthy discussion of the advantages and disadvantages of amalgamations. On the whole, I think it may be said that it is to the interest of trade, with proper safeguards for the interests of the community, that trade amalgamations should be encouraged. They serve to eliminate competition, they lessen cost of production and, therefore, material advantages accrue all round, of course, assuming that the financial operations involved are of a sound character. Under these circumstances, we shall offer no objection to this new Clause. I think the Chancellor of the Exchequer is well advised in extending the scheme to include those cases which would have been left outside the operation of the original proposal. I have never been very much enamoured of the Stamp Duties. They are a rather prolific source of revenue, but that is the best that can be said for them. Undoubtedly, they
are more or less a serious burden upon industry. It will be within the recollection of the House that a few months ago a very extensive merger took place in the chemical industry and, if I remember rightly, £1,000,000 or more was paid in Stamp Duty, although in that case there was no additional capital. That charge becomes a permanent addition to the charges on the company. The Chancellor of the Exchequer says that he is advised that there is not much revenue involved in this concession. Even if there be a slight loss, I think he will gain it indirectly in the larger profits of the companies and, therefore, a larger yield from Income Tax. For these and other reasons which could be stated, we shall give our support to this new Clause.

Mr. HERBERT WILLIAMS: I think it is rather unfair to Members of this House that we should have a new Clause occupying two and a half pages of the Order Paper presented to us on Saturday morning, without any opportunity of finding out what it all means. As far as I can make out, it is a desirable new Clause, but on behalf of a great many Members I wish to give expression to a little protest against the great delay in publishing it in time to give us an adequate opportunity of studying it.

Mr. CHURCHILL: I would appeal for the indulgence of the House in order to answer my hon. Friend. I had intended to deal with the point when I explained the new Clause. I should like to express my great regret that it was not possible to put the Amendments on the Order Paper until Saturday morning. The reason was not, as has been unkindly suggested in certain quarters, because of some desire on my part to prevent hon. Members on both sides of the House from mastering the Clauses and understanding the subjects with which they deal and consequently to disable them from taking effective part in the Debate. I have far too much pride in the House of Commons and in the Parliamentary work which I have the honour to discharge ever to play such a trick as that. All I desire is to secure that the real issues of debate are brought to test in good time in the House, so that those who disagree can express their views and take their line.
The reason we have, unfortunately, had delay in this respect was simply because during the whole of the week the head officials of the Inland Revenue were engaged in seeing hon. Members and trying to meet objections in every way, as some of those now present can testify, in order that the Amendments put on the Order Paper should as far as possible embody to the fullest extent the concessions which we were able to give. Nevertheless, I wish to express my regret to the House that such a lengthy new Clause should have been placed on the Order Paper at such short notice.

Sir ALFRED MOND: I have handed in a manuscript Amendment. May I move it now?

Mr. SPEAKER: After the Clause has been read a Second time.

Question put, and agreed to.

Clause read a Second time.

Sir A. MOND: I beg to move, as an Amendment to the proposed new Clause, in line 64, to leave out from the word "under" to the word "this" in line 65.
I have to apologise to the House. This Amendment is not on the Order Paper, but it is owing to the fact that the new Clause of the Chancellor of the Exchequer was only issued on Saturday. I have to thank the Chancellor of the Exchequer for having met a number of the objections which were raised to the original Clause, Clause 48, and as he has met most of the objections, I hope he will extend his work to its logical conclusion by accepting this Amendment. The original Clause was limited to relief in cases in which either a new company was registered or the existing company dealt with an increase of capital. A third case exists which is not provided for. It arises in the case of an unregistered company which has a certain amount of unissued share capital and uses part of that capital for the purposes of amalgamation. The Chancellor of the Exchequer in his new Clause has met this point as far as dealing with the unissued share capital for the purposes of amalgamation. He has limited the relief to conveyances and transfer duties. The object of my Amendment is to make this relief complete and make it also apply in respect of company capital duty. I cannot see why there should be a differentiation
between the two forms of duties, As a matter of fact, there does not seem to be any logical basis in applying this relief to conveyances and transfer duties and denying it in respect of company capital duty. I suggest that perhaps this point, owing to the difficulty and perplexity of drafting this new Clause, may have been overlooked. The equity of the step is quite obvious, and I feel that if the Chancellor of the Exchequer had had time to go fully into the question he would accept my Amendment. It is obviously right to extend the relief to unissued share capital in the case of transfer duties, and if that is so, I cannot see any ground for not granting a like relief in the case of company capital duty. From the business point of view, it is extremely inconvenient to have to make frequent issues of capital. It is very inconvenient as the Chancellor of the Exchequer is no doubt well aware. It means a large amount of formalities and special meetings of the shareholders, and in the case of a large company carrying out a policy and building up a large organisation, it may be forced to take such steps as these two or three times in the year. That is extremely inconvenient and could be avoided it my Amendment is accepted. Even from the revenue point of view, it will be more convenient that company capital duty should be paid on any increase of nominal share capital with a view of future amalgamation, and that duty will remain in the hands of the Revenue authorities until such time as the whole of the unissued capital is used for the purpose contemplated. The Chancellor of the Exchequer will lose no revenue and I am assured, on very expert advice, that it will be a great convenience.

The ATTORNEY-GENERAL (Sir Douglas Hogg): The Government do not think this Amendment is reasonable, because, in effect, it would give a repayment of company capital duty in cases in which the capital has not only been issued but has, in fact, been used. Let me give an illustration. Suppose there was a company with a capital of £30,000. It reduces its capital—I have instances in my mind—to £20,000, of which £10,000 is treated as issued under the new scheme and £10,000 is treated as unissued. On
its original capital of £30,000, which has been used, it has paid capital duty. Now, in its reconstructed form, the company has £10,000 issued capital and £10,000 unissued capital, but if the Amendment was accepted the effect would be that should it use this £10,000 unissued capital for the purpose of new business it would not only get off any transfer duty on that purchase, which it does under the terms of the new Clause, but it would also get repayment from the revenue of the capital duty it had originally paid on the £10,000, although that £10,000 had, in fact, been issued and used in the business. It does not seem to be a reasonable proposal. Although we quite recognise the intention behind the Amendment, in our opinion, it would go too far and give relief to cases to which the new Clause is not intended to apply.

Amendment to proposed new Clause, negatived.

Clause added to the Bill.

NEW CLAUSE.—(Amendment of 15 and 16 Geo. V., c. 36, s. 15.)

"Sub-section (1) of Section fifteen of the Finance Act, 1925 (which makes allowances in respect of earned incomes), shall have effect as if for the words "one-sixth" there were substituted the words "one-fifth."—[Mr. Lees-Smith.]

Brought up, and read the First time.

Mr. LEES-SMITH: I beg to move, "That the Clause be read a Second time."
4.0 p.m.
This Clause is rather more controversial than those we have discussed up to the moment, and it is intended to call attention to the proportion of taxation which is at present paid by the payers of Income Tax on earned as against unearned income. The Income Tax differentiates between earned income and unearned income, and it gives to those who pay on earned income a rebate of one-sixth as against those whose income is derived from securities, investments and property. We propose to increase this rebate from one-sixth to one-fifth, and we do so in order to express our view that the proportion of taxation borne by earned and unearned income respectively is at present unfair. If the whole system was so readjusted that there was a smaller proportion of the total borne by those who pay on
earned income and a larger proportion of the total borne by those who pay on unearned incomes that would give us a wider general equity and a more widespread economic advantage. To give two main reasons for this proposal, the first is that the possessor of an earned income is the possessor of a precarious income. A man whose income depends on earnings knows that if he loses his connection, if he loses his goodwill, if he falls ill, if he is struck by any of the blows or contingencies of life, that income comes to an end, and, in any case, he has to look forward to the time when he retires, or when he dies, when the income is inevitably bound to disappear. The anxieties which arise from this source are not confined to manual workers. There are, as we know, hundreds of thousands of small professional men, the lower paid Income Tax payers, who are harassed and worried by the insecurity, by the knowledge that if they lose their posts or lose their earning-power, those who look to them, and they alone, have no one left to protect them. There is a very great difference between that man and the man with the same income derived from War Loan, or investments, or other sources of unearned income. The second man is free from any of those changes and chances of life. He falls ill, or dies, or grows old—his income comes smoothly in all the time. He need not save; he need not insure. His time is his own to follow whatever tastes or interests he prefers. The situation of those two men is not the same. One man, in my opinion, is at least twice as well situated as the other, and a differentiation of tax of only one-sixth is an altogether inadequate measure of their relative economic position.
There is one other reason we wish to give on behalf of this Clause. This view has been powerfully, in fact, overwhelmingly strengthened by the fall in prices that has taken place in the last seven years. I remember last year, in the Budget discussions, the Chancellor of the Exchequer pointing out that the workers of this country had improved their position in the last seven years because prices had fallen one half, and real wages had risen to a corresponding extent. That is one side of the picture.
The other side of the picture is that their money wages have fallen by about £700,000,000 a year, and that fall has more than counterbalanced the advantage gained from the fall in prices. But if you come to the particular section whose position we are now discussing, those who live on securities, they have obtained the advantage of the fall in prices, and their income has not suffered the corresponding reduction. If they had their money, say, in debentures, and were getting six, eight or ten per cent. in 1920, the contract still holds good, and they are presumably getting that still. If they invested their money in 6 per cent. debentures in 1920—

Sir BERTRAM FALLE: I wish the hon. Member would tell us of those investments.

Mr. LEES-SMITH: The hon. Gentleman does not know of 6 per cent. debentures?

Lieut.-Colonel Sir FREDERICK HALL: You said 8 or 10 per cent.

Mr. LEES-SMITH: If the hon. and gallant Gentleman does not know of any 10 per cent. debentures—

Sir F. HALL: I do not know of any.

Mr. LEES-SMITH: If the hon. and gallant Member goes back to 1920, there were many debentures of 10 per cent.

Sir F. HALL: Can the hon. Gentleman quote one?

Mr. LEES-SMITH: Whatever the percentage, the fact is that the amount received in 1920 is being received still, and as prices have fallen by one-half, the value has doubled in the last seven years. What is the effect of that upon the whole financial policy of the Government? The central object of the Chancellor of the Exchequer has been to bring down direct taxation, and he has succeeded in reducing Income Tax and Super-tax so as to distribute between £30,000,000 and £40,000,000 amongst the Income Tax and Super-tax payers. But who has received the bulk of the money? I see from the latest figures of the Inland Revenue that 70 per cent. of the Income Tax comes from those who pay on unearned income, so that it means that more than half the bulk of the relief in taxation through the reduction of Income Tax and Super-tax which the Chancellor of the Exchequer has granted during his tenure
of office has gone to this class, whose incomes have doubled in the last seven years. That is, in our opinion, a scandal and an injustice to every other taxpayer in the country, and as a first step towards bringing it to an end, I move the new Clause which stands in my name.

Mr. GROVES: I beg to second the Motion.

The FINANCIAL SECRETARY to the TREASURY (Mr. Ronald McNeill): The hon. Gentleman, in moving the Second Reading of this Clause, has covered rather familiar ground. Hon. Members opposite have frequently expressed their view with regard to the relation between direct and indirect taxation. The hon. Member knows quite well that the views he has expressed are not generally held, at any rate, to the extent to which he expressed them, on this side of the House, and, apart altogether from the views which may be held on one side of the House or the other on the merits of direct and indirect taxation, I do not think that particular question has any but the most indirect relevance to the proposal the hon. Gentleman is making here. The differentiation, of which the earned income allowance is only one factor, is, as the House is aware, a general scheme for the purpose of differentiation and graduation of the Income Tax. That system, as hon. Members know, was introduced in 1920. Up to that time the purpose of graduation had been carried out by a different system of leaps and bounds at different stages of income. All these anomalies and inconveniences were done away with by the new system, introduced in 1920, by which graduation was put upon its present footing of a number of allowances. At that time the earned income allowance was an allowance of one-tenth, and that was the amount which was recommended by the Royal Commission, of which the right hon. Gentleman opposite, may I say, was a distinguished member, and as he was a party to the recommendation that it should be a uniform allowance of one-tenth, with a maximum reduction of £200, I find it a little difficult to understand why he is now—if he is—supporting the proposal of the hon. Gentleman beside him.
But it does not end there. We would have been on very strong ground if that
recommendation of the Royal Commission had remained to the present moment. But, in 1925, a very large move was made in the direction of an increased allowance to earned income by my right hon. Friend in the Budget of that year, when he changed the proportion from the one-tenth, at which it was placed on the recommendation of the Royal Commission, and put it at one-sixth instead. That was a change which, at the time, was estimated to have cost the Exchequer no less a sum than £7,500,000, and it would require very much stronger reasons than the hon. Gentleman has offered to the House to persuade us that that very large addition, which was given such a short time ago as 1925, should be reviewed at the present moment and changed. And what reason has the hon. Member for asking the House to make this change? I cannot help thinking that this is really what we usually call a "hardy annual," and the record of this particular proposal during recent years is not without interest. I find that in 1926, in 1925, in 1923 and in 1922, this proposal was moved by a Labour Member. There is the very significant omission of 1924. In 1924 a similar Clause was moved, but it was not moved by a Labour Member. It was moved on that occasion by a Liberal Member. My recollection is not good enough to know whether the hon. Member who moved it to-day was a Liberal or a Labour Member at that time. I have not had the curiosity to look at the Division Lists on that occasion to see on which side the hon. Member's vote was cast.

Mr. LEES-SMITH: I was not in the House.

Mr. McNElLL: If the hon. Member was not in the House, he is free from all responsibility. He was very fortunate if he was not in the House in 1924. At all events it is an interesting record. The Labour party moved this new Clause in 1922, 1923, 1925, 1926 and now in 1927, but rejected this Amendment by 187 to 69 in 1924. I gather from the figures and from my recollection of the composition of the House at that time that as the new Clause was moved by a Liberal in 1924, the 69 who supported it must have been all Liberal Members, and the then Chancellor of the Exchequer in resisting the new Clause had the support of the Tory party. We were together apparently
in those days in resisting the new Clause which the hon. Member has moved to-day. In those circumstances we must allow the record to be increased by one more to-day, and next year we shall know the numbers by which it was defeated.
But I have to state one single fact which by itself would have been quite sufficient to have persuaded the House to resist this new Clause, and that is that if it were adopted it would cost no less than £3,100,000 in a full year. The hon. Gentleman was candid enough to say that he was moving the new Clause not merely as an isolated proposal for dealing with the finance of the year, that what he wants to do is to alter the whole system. He says that the whole system should be readjusted so as to give larger relief to earned as distinct from unearned income. That was a candid statement by the hon. Member. He can hardly expect that at this stage of our proceedings we have the time or the information or even the preparation to alter the whole system in the direction that he desires. In these circumstances, having regard to the cost involved, I think the House will support us in keeping the Bill as it stands.

Mr. MONTAGUE: The airy persiflage of the Financial Secretary is all very well, but he omitted to mention that when the Labour Government was in office and the then Chancellor of the Exchequer produced his Budget, my right hon. Friend included within the Clauses of his Budget considerable reliefs to earned income which the present Government have not seen fit to include. If the Conservative Government, instead of making huge presents to people who live on rent and interest and upon unearned incomes, had seen that indirect taxation was reduced, and if they had endeavoured to make the lot of the poorer sections of the community a little bit easier than it is, there might have been some point in the argument of the Financial Secretary that 1924 showed a

lapse in regard to this particular new Clause. I do not wish to prolong the Debate, but I cannot help comparing the point of view expressed by the Government in opposing this new Clause and that expressed in the Debate of Thursday last. Then we were discussing the question of Poor Law relief in a certain quarter of London, and the Conservative party justified a standard of Poor Law relief that was simply intolerable to anyone with any humane feelings whatever. When an opportunity is given to the Government to make the position of the poorer sections of the community—not necessarily the poorest—a little bit easier with regard to the alleviation of taxation, then they plead that they cannot do anything at all, that the Budget must stand four-square as it is, and that the people who do not earn their incomes are to have an advantage against those who do earn their incomes. That means, of course, that those who earn their incomes have to pay more than they would otherwise pay.

That is the attitude that I want to emphasise here, and do my best to emphasise away from this House. The Conservative party in the constituencies continually plead that they represent the middle classes of the community. They talk about being the people who stand for the backbone of the country. The middle class vote goes very largely to the Conservative party. The Labour party proposes to do a bit of good to the middle classes, and a Conservative Government, which stands for big finance and big business, rejects the proposal contemptuously. It is the kind of thing that will do very little credit to the Government when it does eventually go to the country.

Question put, "That the Clause be read a Second time."

The House divided: Ayes, 79; Noes, 206.

Division No. 265.]
AYES.
[4.23 p.m.


Adamson, Rt. Hon. W. (Fife, West)
Brown, Ernest (Leith)
Day, Colonel Harry


Adamson, W. M. (Staff., Cannock)
Brown, James (Ayr and Bute)
Duncan, C.


Alexander, A. V. (Sheffield, Hillsbro')
Buchanan, G.
Dunnico, H.


Attlee, Clement Richard
Charleton, H. C.
Gardner, J. P.


Baker, Walter
Campton, Joseph
Gillett, George M.


Batey, Joseph
Cove, W. G.
Graham, Rt. Hon. Wm. (Edin., Cent.)


Beckett, John (Gateshead)
Cowan, D. M. (Scottish Universities)
Greenwood, A. (Nelson and Colne)


Bondfield, Margaret
Crawfurd, H. E.
Griffiths, T. (Monmouth, Pontypool)


Bowerman, Rt. Hon. Charles W.
Dalton, Hugh
Groves, T.


Briant, Frank
Davies, Ellis (Denbigh, Denbigh)
Grundy, T. W.


Broad, F. A.
Davies, Rhys John (Westhoughton)
Hall, F. (York, W. R., Normanton)


Hall, G. H. (Merthyr Tydvil)
Lunn, William
Snowden, Rt. Hon. Philip


Hamilton, Sir R. (Orkney & Shetland)
MacDonald, Rt. Hon. J. R. (Aberavon)
Stamford, T. W.


Hardie, George D.
Mackinder, W.
Sutton, J. E.


Harris, Percy A.
MacLaren, Andrew
Thomas, Rt. Hon. James H. (Derby)


Hartshorn, Rt. Hon. Vernon
Maclean, Nell (Glasgow, Govan)
Thorne, W. (West Ham, Plaistow)


Henderson, Rt. Hon. A. (Burnley)
Maxton, James
Thurtle, Ernest


Hirst, G. H.
Montague, Frederick
Townend, A. E.


Hirst, W. (Bradford, South)
Morrison, R. C (Tottenham, N.)
Trevelyan, Rt. Hon. C. P.


Hore-Bellsha, Leslie
Oliver, George Harold
Viant, S. P.


Hutchison, Sir Robert (Montrose)
Pethick-Lawrence, F. W.
Whiteley, W.


John, William (Rhondda, West)
Ponsonby, Arthur
Wilkinson, Ellen C.


Kelly, W. T.
Potts, John S.
Wilson, C. H. (Sheffield, Attercliffe)


Kennedy, T.
Scurr, John



Lansbury, George
Shaw, Rt. Hon. Thomas (Preston)
TELLERS FOR THE AYES.—


Lawrence, Susan
Smith, Ben (Bermondsey, Rotherhithe)
Mr. Allen Parkinson and Mr. A.


Lee, F.
Smith, H. B. Lees (Keighley)
Barnes.


Lowth, T.
Snell, Harry



NOES.


Acland-Troyte, Lieut.-Colonel
Forrest, W.
Mitchell, W. Foot (Saffron Walden)


Agg-Gardner, Rt. Hon. Sir James T.
Foxcroft, Captain C. T.
Mitchell, Sir W. Lane (Streatham)


Albery, Irving James
Fremantle, Lieut.-Colonel Francis E.
Monsell, Eyres, Com. Rt. Hon. B. M.


Amery, Rt. Hon. Leopold C. M. S
Ganzoni, Sir John
Moore, Lieut.-Colonel T. C. R. (Ayr)


Apsley, Lord
Gates, Percy
Moore-Brabazon, Lieut.-Col. J. T. C.


Baldwin, Rt. Hon. Stanley
Gibbs, Col. Rt. Hon. George Abraham
Moreing, Captain A. H.


Balniel, Lord
Glyn, Major R. G. C.
Morrison, H. (Wilts, Salisbury)


Barnett, Major Sir Richard
Gower, Sir Robert
Nail, Colonel Sir Joseph


Beamish, Rear-Admiral T. P. H.
Grace, John
Nelson, Sir Frank


Betterton, Henry B.
Grant, Sir J. A.
Newman, Sir R. H. S. D. L. (Exeter)


Birchall, Major J. Dearman
Grattan-Doyle, Sir N.
Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld.)


Bird, E. R. (Yorks, W. R., Skipton)
Greenwood, Rt. Hn. Sir H. (W'th's'w, E)
Nield, Rt. Hon. Sir Herbert


Boothby, R. J. G.
Grenfell, Edward C. (City of London)
Nuttall, Ellis


Bourne, Captain Robert Croft
Grotrian, H. Brent
Oakley, T.


Bowyer, Captain G. E. W.
Gunston, Captain D. W.
Oman, Sir Charles William C.


Briggs, J. Harold
Hall, Lieut.-Col. Sir F. (Dulwich)
Ormsby-Gore, Rt. Hon. William


Brocklebank, C. E. R.
Hammersley, S. S.
Percy, Lord Eustace (Hastings)


Broun-Lindsay, Major H.
Hannon, Patrick Joseph Henry
Peto, Sir Basil E. (Devon, Barnstaple)


Brown, Col. D. C. (N'th'l'd., Hexham)
Harrison, G. J. C.
Peto, G. (Somerset, Frome)


Brown, Brig.-Gen. H. C. (Berks, Newb'y)
Hartington, Marquess of
Pilcher, G.


Buchan, John
Harvey, G. (Lambeth, Kennington)
Pilditch, Sir Philip


Buckingham, Sir H.
Headlam, Lieut.-Colonel C. M.
Pownall, Sir Assheton


Burton, Colonel H. W.
Heneage, Lieut.-Col. Arthur P
Price, Major C. W. M.


Butler, Sir Geoffrey
Henn, Sir Sydney H.
Raine, Sir Walter


Cadogan, Major Hon. Edward
Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.
Rawson, Sir Cooper


Campbell, E. T.
Hogg, Rt. Hon. Sir D. (St. Marylebone)
Remnant, Sir James


Cautley, Sir Henry S.
Hope, Sir Harry (Forfar)
Rhys, Hon. C. A. U.


Cayzer, Sir C. (Chester, City)
Hopkins, J. W. W.
Rice, Sir Frederick


Cecil, Rt. Hon. Sir Evelyn (Aston)
Hopkinson, A. (Lancaster, Mossley)
Richardson, Sir P. W. (Sur'y, Ch'ts'y)


Chadwick, Sir Robert Burton
Hume, Sir G. H.
Roberts, Sir Samuel (Hereford)


Chamberlain, Rt. Hn. Sir J. A. (Birm., W.)
Hunter-Weston, Lt.-Gen. Sir Aylmer
Robinson, Sir T. (Lancs., Stretford)


Chamberlain, Rt. Hon. N. (Ladywood)
Hurd, Percy A.
Ropner, Major L.


Charteris, Brigadier-General J.
Hurst, Gerald B.
Russell, Alexander West (Tynemouth)


Christie, J. A.
Inskip, Sir Thomas Walker H.
Salmon, Major I.


Churchill, Rt. Hon. Winston Spencer
Jackson, Sir H. (Wandsworth, Cen't)
Samuel, A. M. (Surrey, Farnham)


Churchman, Sir Arthur C.
James, Lieut.-Colonel Hon. Cuthbert
Sandeman, N. Stewart


Cobb, Sir Cyril
Kennedy, A. R. (Preston)
Sanders, Sir Robert A.


Cochrane, Commander Hon. A. D.
Kinloch-Cooke, Sir Clement
Sandon, Lord


Cockerill, Brig-General Sir George
Knox, Sir Alfred
Scott, Rt. Hon. Sir Leslie


Couper, J. B.
Lamb, J. Q.
Simms, Dr. John M. (Co. Down)


Craig, Sir Ernest (Chester, Crewe)
Lane Fox, Col. Rt. Hon. George R.
Skelton, A. N


Crooke, J. Smedley (Deritend)
Lister, Cunilffe, Rt. Hon. Sir Philip
Smith-Carington, Neville W.


Crookshank, Col. C. de W. (Berwick)
Locker-Lampson, G. (Wood Green)
Smithers, Waldron


Crookshank, Cpt. H. (Lindsey, Gainsbro)
Loder, J. de V.
Somerville, A. A. (Windsor)


Cunliffe, Sir Herbert
Long, Major Eric
Spender-Clay, Colonel H.


Davies, Maj. Geo. F. (Somerset, Yeovil)
Looker, Herbert William
Sprot, Sir Alexander


Davies, Dr. Vernon
Lucas-Tooth, Sir Hugh Vere
Stanley, Lieut.-Colonel Rt. Hon. G. F.


Davison, Sir W. H. (Kensington, S.)
Lumley, L. R.
Steel, Major Samuel Strang


Dean, Arthur Wellesley
Macdonald, R. (Glasgow. Cathcart)
Storry-Deans, R.


Drewe, C.
Macdonnell, Colonel Hon. Angus
Stuart, Hon. J. (Moray and Nairn)


Eden, Captain Anthony
MacIntyre, Ian
Sueter, Rear-Admiral Murray Fraser


Edmondson, Major A. J.
McLean, Major A.
Sykes, Major-Gen. Sir Frederick H.


Edwards, J. Hugh (Accrington)
Macmillan, Captain H.
Tasker, R. Inigo.


Elliot Major Walter E.
McNeill, Rt. Hon. Ronald John
Templeton, W. P.


Ellis, R. G.
Macquisten, F. A.
Thomson, F. C. (Aberdeen, South)


Elveden, Viscount
Mac Robert, Alexander M.
Thomson, Rt. Hon. Sir W. Mitchell-


Erskine, Lord (Somerset, Weston-s.-M.)
Makins, Brigadier-General E.
Titchfield, Major the Marquess of


Evans, Captain A. (Cardiff, South)
Malone, Major P. B.
Tryon, Rt. Hon. George Clement


Everard W. Lindsay
Manningham-Buller, Sir Mervyn
Vaughan-Morgan, Col. K. P.


Fairfax, Captain J. G.
Margesson, Captain D.
Wallace, Captain D. E.


Falle, Sir Bertram G.
Marriott, Sir J. A. R.
Ward. Lt.-Col. A. L. (Kingston-on-Hull)


Fermoy, Lord
Meller, R. J.
Waterhouse, Captain Charles


Fielden, E. B.
Meyer, Sir Frank.
Watson, Rt. Hon. W. (Carlisle)


Forestier-Walker, Sir L.
Mitchell, S. (Lanark, Lanark)
White, Lieut.-Col Sir G. Dairymple




Williams, Com. C. (Devon, Torquay)
Wise, Sir Fredric
Wragg, Herbert


Williams, Herbert G. (Reading)
Wolmer, Viscount
Young, Rt. Hon. Sir Hilton (Norwich)


Wilson, R. R. (Stafford, Lichfield)
Womersley, W. J.



Winby, Colonel L. P.
Wood, Sir Kingsley (Woolwich W.)
TELLERS FOR THE NOES.—


Windsor-Clive, Lieut.-Colonel George
Wood, Sir S. Hill- (High Peak)
Major Cope and Mr. Penny.


Winterton, Rt. Hon. Earl
Worthington-Evans, Rt. Hon. Sir L.

NEW CLAUSE.—(Repeal of lace duty.)

"As from the thirty-first day of July, nineteen hundred and twenty-seven, the duty chargeable upon lace, imposed by Section six of the Finance Act, 1925, shall cease."—[Mr. Gillett.]

Brought up, and read the First time.

Mr. GILLETT: I beg to move, "That the Clause be read a Second time."
It cannot be claimed by the Financial Secretary to the Treasury that this proposal is a hardy annual, because the duty on lace has only been in operation for the last two years. The proposed New Clause is to the effect that the duty chargeable upon lace imposed by the Finance Act of 1925 should now cease. I may remind the House that a Committee under the Safeguarding of Industries Act was appointed in March, 1925, at the request of the Federation of Lace and Embroidery Employers' Associations, fortified by one or two other associations and also supported by the British Lace Operatives' Federation. On the other hand, we have the rather extraordinary fact that the application for duty was opposed by the Lace and Embroidery Group of the London Chamber of Commerce. The reason given by those who were anxious to have a duty imposed was that it would help the export trade and their application was based on figures dealing with the export trade. They pointed out that in 1913 the United States imported from this country 5,900,000 dollars' worth of goods, and from France 5,300,000 dollars' worth. Ten years later the figures were 800,000 dollars' worth from this country, and 4,800,000 dollars' worth from France. They argued from these figures that in some way—which was rather difficult to see—the imposition of a duty would be to the advantage of the export trade.
The right hon. Gentleman the Member for Carmarthen (Sir A. Mond), who was then, I think, sitting on the benches below the Gangway, pointed out during the Debate that in Calais only 50 per cent. of the machinery was employed—that, in a protected country, only half the looms were at work. He then expressed a view which is, I believe, held
by many others, that the real problem confronting the lace industry was not foreign competition but the change which had taken place in regard to the use of the goods which were formerly manufactured principally in Nottingham. He also pointed out that in 1907, 73 per cent. of the total output was exported, leaving only the small amount of 27 per cent. to the home trade, and the committee reported that they were informed that the position was very much the same in 1925. The right hon. Gentleman then asked how a duty of 33⅓ per cent. would enable the manufacturers to recapture export trade, and he suggested that if the Government wanted to help the lace industry, a subsidy would be more suitable than a duty. We have now had two years' experience of the duty, and we are able to see how far the export trade has been helped by it. I find that in 1924, the last year before the duty was imposed, the total of exports was £2,620,000. If we take 1926, the first complete year after the imposition of the duty, we find that the exports have fallen to £1,948,000. The argument may be used that the general strike in 1926 and the coal stoppage explain this difference, but looking at the first four months in each of the two years, 1925 and 1926, we find that the export trade in 1925 was £865,000, and in 1926 that had fallen to £660,000. The same tendency is shown if we take the first five months of 1926 and compare them with the first five months of this year. The figures fell from £770,000 to £683,000. Therefore, it does not seem that the duty has been of any benefit to the export trade. Still, that was one of the points which was emphasised when the application was made and, therefore, I am laying stress upon it.
Let us now look at the question of imports. It might be supposed that imports would be affected by the imposition of a duty, but the figures which were given during March in answer to a question by the hon. Member for Dewsbury (Mr. Riley) do not seem to justify the duty in this respect either. In 1924 the imports, less re-exports, came to
£505,000; in 1925 the figure rose to £609,000, and in 1926 it had fallen to £458,600. Even if allowance is made for the industrial disturbance of 1926, there is nothing in these figures to justify the policy of the Government. Although the question asked by the hon. Member for Dewsbury was as to the amount of imports, the answer dealt with imports less re-exports, and rather extraordinary figures have been presented by one of the newspapers in a report on the lace trade. In 1924 we are told the imports were £2,330,000, and the re-exports £1,830,000, and two years later, after the duty had been imposed for some time, the imports were £607,000 and the re-exports about £100,000. What seems to have happened is that the re-export trade has almost entirely disappeared; and although the figures given in the last Board of Trade document seem to be slightly better, there does not seem to have been otherwise any very great change to justify those who were enthusiastic supporters of the duty.
Meanwhile, the employers issued a statement in which they claimed that their home trade had increased by about 18 per cent. If we look at these figures, and consider how much of the imports are left in the country, I think we must conclude that, if they have improved their trade, they could have improved it without the duty. The difference is very small—only something like £50,000—as affecting the goods actually left in this country, taking the difference between the imports and the re-exports. Therefore, to sum up that side of the question we find that the exports have fallen off by about 25 per cent., and if we take the home trade, we find the claim made by the manufacturers—though no figures have been put up to justify it—is that there has been an 18 per cent. improvement, whilst the re-export trade has been almost annihilated. That is the experience since the duty was imposed, and meanwhile, on the Continent we find that Germany has been pushing her lace in the American market. In 1924 she sent 657,000 marks' value of goods to America, and two years later that figure had risen to over 2,000,000 marks.
I endeavoured to see if any information could be obtained dealing with the important question of employment. I find the number of people employed is
less, and that is explained by the fact that this is to a large extent a dying industry. The number unemployed in July, 1925, was 3,800, and in July, 1926, 4,035. The latest figure which I have seen is for February, and it is 2,389, but I should like to know whether in this particular trade July and February figures are properly comparable in this respect. We know that in many trades the unemployment figures in February cannot be compared with the figures for July; but I do not know enough about the lace trade to know whether in that case it is a fair comparison. At any rate, from the export and import figures, it is difficult to see how there could be any large increase in the number of people employed. Unless the Minister is prepared to show that the figures I have presented are not correct, I fail to see how he can argue that this duty has been of any benefit. The final conclusion reached by the right hon. Gentleman the Member for Carmarthen was that the trade is a dying one. People do not use nowadays the lace curtains which were formerly so popular, and if the demand has ceased it is hopeless to seek to revive it by the imposition of duty. At the same time, I cannot see how this duty could have been of any advantage to the export trade. Surely, if there was need of help in regard to the export trade, the only way to help it was by a reduction in the cost of manufacture. What you want to know is how you are going to reduce costs in order to produce goods at a lower price, and so compete with the other countries in the markets of the world. I was interested to notice in the "Manchester Guardian" commercial supplement of this week a sentence which refers to another aspect of this question:
The present revival of smuggling appears to be principally in silk, lace, and other commodities on which a high duty was recently placed. Needless to say the reputable trader suffers as much as the Revenue.
As far as one can see, that is the only definite result of this duty. The smuggling of lace has become a temptation to those who are interested, and who think they can make a little profit in that way at the expense of the Revenue. Looking at all the facts, it seems to me my proposal is amply justified.

Mr. HARRIS: I beg to second the Motion.
A very strong case has been made out by the hon. Member for Finsbury (Mr. Gillett) in favour of dropping this duty. He has shown that while some small advantage may have accrued to the town of Nottingham, the loss to the country has been considerable. I am not ashamed to speak as a London Member. I know the fashion now is to speak with contempt of the working men and business men of London as if they were to be ignored. We have heard of great cities being brought into decay by bad government and unsound legislation. The various actions of this Government are tending to do immense harm to the business men, traders and workpeople of London. London exists because of its river and its port; and the Port of London is suffering from the experiments in Protection which are being made by the Government. As has been shown by the hon. Member for Finsbury, trade is being diverted from the port of London to many ports on the Continent. The long queues of men waiting to work at the docks and the large number of unemployed in the packing trade and in the warehouse business give eloquent testimony of the result of the policy of the so-called safeguarding of industries. Some sections may be safeguarded, but the great shipping and carrying trades, the great packing and dock industries are all suffering as a consequence.
The hon. Member for Finsbury showed conclusively that, as a result of these duties, the actual retained imports have, if anything, increased. There is no diminution, apparently, in the amount of foreign lace used by the women of this country. The trades that have been injured by these duties are the merchant trades, the carrying trades, the packing industry, and all the industries that are concentrated in the great port of London, and that exist because London in the past has been a free port. The actual figures show that the decrease in the re-exports, or of the lake passing through the port of London to be distributed all over the world, to the Empire, to Canada, to the United States of America, has been immense; and that
has done untold injury to very many trades. I am not quite so pessimistic as the hon. Member for Finsbury, and I am not going to say that the lace industry is dead. Lace is subject to the vagaries of fashion, and women's whims are peculiar. To-day they will want one thing with which to decorate themselves, and to-morrow they will be attracted by some article which is at present out of fashion. There may be, in the course of time, a revival of the lace industry, and again prosperity may come, not only to Nottingham, but to all the many manufacturing centres on the Continent that concentrate on the production of lace; but, as I said in a previous Debate, before the people of Nottingham are entitled to ask for special protection, to the injuring of our foreign trade, they ought to put their own house in order and to be prepared to go with the times.
I have taken a little trouble, as I think we are bound to do nowadays, with so many industries brought to us for consideration, to obtain some information about lace, and it may be of interest to the House to know that Nottingham made in the past what is called Normandy lace, which was turned out by machinery by the yard, very much like sausages are turned out—a simple standard pattern. Fashions have so changed now that there is practically no demand for this lace. It is not that it is being made by the foreigner; it is not being made by anybody, because women no longer want it. I could give a great number of examples. Here is another, an article called Valenciennes, which is certainly very beautiful to the male mind, but it is now no longer used. There is good machinery in Nottingham to turn out this most attractive thing, but, unfortunately, now, not even the Parliamentary Secretary to the Board of Trade could induce women to decorate themselves with this charming lace; not all the blandishments of the Safeguarding of Industries Act can do it. We have heard of the sumptuary duties, which came into force to prevent the use of luxuries by women, but I think we ought to have a new kind of legislation, compelling women to wear Nottingham lace, compelling householders to hang up
Nottingham lace curtains. [An HON. MEMBER: "A chance for the Liberal party!"] No; we are more intelligent than that. It is the hon. Members opposite who believe in this State interference with trade and that they can restore industries by artificial means; we believe that what an industry wants is the healthy breeze of competition.
I have taken the trouble to find out whether there is any demand for lace, and here I have something—I suppose it is a terrible thing to show anything of foreign manufacture—known as guipure lace, which is manufactured in Germany. It is still, in spite of the 33⅓ per cent. duty, imported into this country, and I am informed that there is hardly a machine in Nottingham able to produce lace of this character. This lace is largely used in women's garments that are sold, not only in this country, but all over the world. The garment trade in the East End of London, and in the West End, is of considerable importance, and this particular lace is attached to the garment for decorative purposes, but when exported it is impossible, owing to the vagaries of the Customs, to get the drawback. [Laughter] That may seem a laughing matter, but these exports help employment. It is our export trade that is suffering, not our home trade. The hon. and gallant Member for Bournemouth (Sir H. Croft) was pointing out the other day, before the Adjournment, the tremendous depression in the exports from this country. Well, here we have the Government coming along with their Safeguarding Duties and taxing what is the raw material, although a manufactured article itself, of a great many industries which depend for their existence on being able to supply themselves with what they require untaxed by the Custom House. For that reason, and for that reason alone, I suggest that we should do well to take off this duty.
Meanwhile, while we are lamenting, and almost boasting of, the depression in the Nottingham lace trade, we have Germany making new experiments and pushing her business. She is capturing many of the markets of which we used
to have almost a monopoly. She has captured the Australian market, not by sending her goods through London warehouses, but by sending them direct from Hamburg, thus giving employment to her packers, dockers, pattern makers, lace finishers, and the hundred and one industries that might have been kept busy in handling these goods in this country. I am told that while this charming cotton lace has gone out of fashion, Germany has been concentrating on the manufacture of lace made from artificial silk, and has made a great advance in that manufacture. Of course, our Chancellor of the Exchequer has had his finger in that pie, and the struggle of the lace industry in Nottingham to manufacture artificial silk lace has not been helped by the duty on artificial silk. On the contrary, owing to the difficulty of getting drawbacks, the German manufacturer has been given an immense advantage.
I think I have made an overwhelming case in favour of dropping this duty—an unanswerable case. Nottingham is not prosperous, Nottingham is still lamenting and weeping, and it would be far better for the Board of Education to step in and develop design. Design is very important, now that the public are more educated and want a well-designed lace. The old mechanical lace that used to be turned out by the thousands of yards is no longer suited for the world's trade. Let them develop the art of design in Nottingham. I am told that they are actually repeating what they have been making for 30 or 40 years past, turning out the old designs and keeping very much, with two or three important exceptions, to the old standard patterns, which did very well in the old Victorian days, but which will not suit present needs. In the same way, the Board of Education should develop technical education. In Germany both machinery and chemistry play a very important part in the manufacture of lace. The use of chemicals is a very big factor in the mass production of lace, and, of course, the development of the ingenious machinery which they have at their lace centres. Let us concentrate more on that sort of thing, and do not let us suggest that our lace manufacturers want the artificial assistance of tariffs, instead
of being able to produce lace to compete with the world because of its quality, beauty, and design.

Mr. BROCKLEBANK: The hon. Member for South-West Bethnal Green (Mr. Harris) said he had made out an overwhelming case for taking off this duty. If he were to go to Nottingham, he would find himself in a wetter condition than he is in now, and he would find that it would require a considerable amount of power, not to convince the people of Nottingham that they have been wrong, but to enable himself to reach the bank of the River Trent. I will give some plain and simple figures as to the condition of the unemployment question in Nottingham. I do not say that they are all that we could desire—they are still very different from what we should like—but I shall be able to prove conclusively that the position is very much better than it was. We were greatly troubled last year by what troubled the whole of this country. The coal dispute shut down the fires of the factories where the lace is prepared, and, therefore, a considerable number of people were unavoidably out of employment. This makes the figures somewhat bad for last year, but when we consider the figures for this year, we find that unemployment has greatly decreased. The figures are taken as at 1st July, but they are not counted until November, as far as the actual numbers registered in the industry are concerned. Therefore, for 1st July this year, we have not yet got the figures, but I will take them as if they were the same as those registered in the industry last year. In 1925, there were 19,500 people registered in the industry; in 1926, owing to the coal trouble and not being able to get fuel, they had dropped to 19,000; and in 1927 I shall take them as being the same as in 1926, namely, 19,000. The numbers of those registered as unemployed in 1925 were 3,378; on 1st July, 1926, there were more unemployed on account of not being able to keep the fires burning, and they were then 3,751; but when we come to 1927, we find that on 1st July the numbers unemployed were 1,404, which means that our unemployment has dropped from 17.7 per cent. to 7.4 per cent. I hope the House will consider that, if we had been able to get through our troubles last year, last year's figures
would have been as different from those of the year before as are this year's figures.

Mr. LEE: How many were employed in those three years?

Mr. BROCKLEBANK: In 1925, 16,082; in 1926, owing to the coal trouble, 15,249; and in 1927, no fewer than 17,596. I think the hon. Member for South-West Bethnal Green had better not come to Nottingham but, if he does, I trust he will not be accompanied by the hon. Member for Finsbury (Mr. Gillett).

5.0 p.m.

Mr. BENNETT: The main argument of the Mover of this new Clause, so far as I have been able to follow it, seems to be that, as the lace industry in this country is dying, the best thing to do is to knock it on the head and kill it right away. I think the lace trade in this country has slightly improved. Since the Safeguarding Duty was put on, if I am correct in my figures, the domestic business has increased by 18 per cent. It looks to me as if the reason why the domestic trade to-day is better is because this duty has been put on, but the hon. Member for South West Bethnal Green (Mr. Harris) gave that as an argument why the duty should be taken away. He stated that the entrepôt trade of this country was being injured by the duty. I quite agree with him that we want to keep the entrepôt trade in London and other ports as high as possible. But, if you compare the merits of the entrepôt trade against a manufacturing industry, I think we ought to look primarily to the interests of the manufacturing industry because it employs more workers in this country.
I do not think it is quite fair to judge what has happened in the lace trade in reference to safeguarding by the results obtained during the period that the duty has been in operation. All hon. Members who are interested in lace know that our main competitors are the French. If my memory serves me aright, when the Safeguarding Duty was first put on, the French exchange was about 90 or 95—I speak subject to correction. When the 33⅓ per cent. duty was put on at that time, it was considered to be an ample safeguard, but, since then, the French exchange has been as high as 250, and it is only now becoming stabilised at
about 120. It is, therefore, too soon to be able to gauge what the safeguarding duty will mean to our lace trade. We require another year's experience of it at least. My information is that the wages in the lace trade in France have gone up considerably as compared to What they were a year ago. Therefore, I believe that, while this duty may not save the lace industry altogether—that will depend upon the ability of our lace manufacturers—it will be very helpful during a very critical time. I suggest to the hon. Member for Bethnal Green that before he speaks about our lace designers being entirely out of date—

Mr. HARRIS: I did not say entirely, but to a great extent.

Mr. BENNETT: I am sure that even that is an over-statement of the case. I do not believe that to-day there is any industry in the country which is more efficient that the lace industry, or one which has had to struggle against greater difficulties.

Sir JOSEPH NALL: I would like to add a word or two against the new Clause. As the hon. Gentleman who has just sat down said, we cannot fully assess the ultimate results of this duty on the lace industry at the present time. The same arguments are trotted out by the other side in relation to all the safeguarding duties. So far as there were any arguments at all in the speech of the hon. Gentleman who moved the Amendment, they were, in my view, in support of the duty and indicated that, perhaps, there had been too long a delay in getting the duty imposed, and that, if it had been much higher, it would have been more effective. He quoted figures and admitted that there had been an increase in the home trade of 18 per cent. He also quoted figures relating to export and re-export. But it is always overlooked by hon. Members opposite that the official returns relating to re-export may be very misleading and may bear no relation to the volume of trade that is actually passing. I believe it will be found that, in this particular case, the official returns relating to re-exports may be made to show a decrease, because the business is still passing by the same routes but by through bills of
lading, and it it not, therefore, included in our re-exports. The volume of traffic may, in future, be even greater and yet, because it passes on through bills of lading, it is not included in the official returns, and the Opposition are able to say, "Here is a case where the re-export trade is declining." The figures quoted by the hon. Gentleman are absolutely no evidence in this case.

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Sir Burton Chadwick): I hardly need to make a speech in response to the speeches from the other side, after the figures which have been given and the devastating facts which have been quoted by hon. Members on this side. The hon. Member for East Nottingham (Mr. Brocklebank), who knows, if anyone knows, all about the lace trade, stated that the improvement that has occurred in the trade is in a large measure owing to this safeguarding duty. The duty, being a safeguarding duty primarily, has, I think we may claim, achieved its object so far as we are able to judge of a duty which has been enforced for only about two years. The hon. Member for Finsbury (Mr. Gillett) said a good deal about imports, exports and re-exports. The trade returns, however, do not give an accurate picture, as values only are recorded. Cotton has fallen considerably in price in the last two years, and, as cotton yarn is a principal raw material and in many cases forms a high proportion of the cost of lace, any deductions drawn from the import and export figures must be given with a large measure of reserve. As an indication of the variation in the price of cotton, which enters so largely into the manufacture of lace, I think it will interest hon. Gentlemen who are not aware of them if I quote some of the figures. In January, 1923, the cost of American 32's was 20½d. to 22d. per pound; and of Egyptian 80's, 37d. to 39d. per pound. It rose until July, 1924. Since then a rapid fall took place, until the end of 1926, when the price of the same two groups of cotton were 11¾ to 13d., and 23½d. to 11½d., as compared with the prices I gave for 1923. That has had a great effect on the general price of cotton lace. Our trade returns, therefore, would be expected to register a fall in both imports and exports even if the trade had practically remained the same.
The United Kingdom exports of cotton lace for the past three years, in value, were: in 1924, £2,500,000; in 1925, £2,250,000 and in 1926, £1,700,000. I confess that I did not follow the figures given by the hon. Gentleman (Mr. Gillett) and I would like to see if he can now follow mine. The figures would show that the United Kngdom manufacturers have secured a larger share of the home market.

Mr. GILLETT: My figures were those which were given to the House in May, 1927.

Sir B. CHADWICK: The fall in the exports is due, to some extent, to reduced purchases by the United States of America, who were one of our best markets. Taking the years 1924, 1925 and 1926, the United States of America imported, in the first of those years, 2,800,000 lbs.; and in 1925, 1,959,000 lbs. For 1926 I have not got the figures for weight, but I have them for value, and they show again a very big reduction, the United States, who were one of our big purchasers, having therefore been one very important cause of the reduced export of lace.

Mr. KELLY: Does that include all types of net and lace?

Sir B. CHADWICK: Only cotton lace. The hon. Member for South-West Bethnal Green (Mr. Harris) is in the habit of enforcing his arguments by demonstration. One day he rattles crockery here. Another day he produces gas mantles, but to-day he produced something which I, wearing these glasses, could not see. The lace industry here and in France would not produce the same volume of material to-day as they did in the past, for one main reason, which is, that the garments to-day are scantier and fewer. The hon. Gentleman found difficulty in understanding the reason for retaining this duty, having regard to the extraordinary drop in re-export in the returns. I think I may be able to explain that partly by the change-over from the practice of shipping lace on through bills of lading to transhipments under bond. Since the imposition of the duty there has been a change over from shipment on through bills of lading, which are included in the trade returns, to transhipments under bond, which are not so
included. The apparent heavy fall in our re-export trade, as far as that goes, is largely due to this change in procedure.

Mr. LEE: Does that mean that they are included in imports but not in exports?

Sir B. CHADWICK: No, that means that they are included in neither—I will read this again. I do not want to commit myself; it is rather technical. Since the imposition of the duty there has been a change over from shipments on through bills of lading, which are included in the trade returns, to transhipments under bond, which are not so included. I am quite sure that will make it clear.

Mr. LEE: I am not clear about it.

Sir B. CHADWICK: I do not think it is necessary to touch on various other points which have been raised, after the speech of my hon. Friend, and I claim that the hon. Member who moved the Amendment has made out no case whatever for removing this duty.

Mr. SNOWDEN: I feel that it needs a considerable amount of courage to say one word on behalf of the new Clause after the devastating speech delivered by the Parliamentary Secretary. The House always listens to the hon. Gentleman with interest and with sympathy. I admire his courage in coming forward this afternoon to oppose this Clause, because apparently he has been deserted on this occasion not only by the Chancellor of the Exchequer, who always beats a hasty retreat when any question of these protective duties is to be discussed, but by the President of the Board of Trade also. What did the devastating speeches delivered by the two representatives of the City of Nottingham, which gave so much comfort to the hon. Gentleman, really amount to? The only point dealt with by the hon. Member for East Nottingham (Mr. Brocklebank) related to the figures of employment. I am not going to challenge the accuracy of those figures, but they certainly are quite at variance with all the figures I have been able to discover, either in official returns or in returns furnished by the trade itself in Nottingham. The hon. Member for Central Nottingham (Mr. Bennett) made a few general statements to the
effect that the lace manufacturers in Nottingham appeared to be satisfied with the working of these duties, adding that perhaps there had not yet been time to see what the full effects would be, and ending up with a digression about the effect of the depreciated French exchange. If those two speeches in opposition to this Clause are regarded as devastating by the Parliamentary Secretary to the Board of Trade, I do not know how he would regard speeches that really did support the actual facts of the situation. The general opinion of the traders in Nottingham is worth a great deal more than figures of unemployment, because these may be vitiated by a number of other considerations. In the "Times" on Saturday there was a reference to the general state of trade, and a comment was made upon the state of the Nottingham lace industry. It said:
At Nottingham, while many branches are dull, the curtain section is fully employed, helped by the demand for coloured curtains, and the fact that casement cloth is out of favour.
The revival in that branch of the trade has not been assisted in the least by the safeguarding duties, but is due to a change of fashion. Let us have some further information on it. So late as the 27th May, less than two months ago, the "Nottingham Guardian" said:
The condition of the lace trade is far from satisfactory. Large numbers of machines are practically unemployed. The export side of the trade remains bad.
How does the hon. Member reconcile the statement he has made in his speech this afternoon with a statement like that? Even the "Board of Trade Gazette," for which the hon. Member has some responsibility, said in January of this year, when these duties had been in operation for 18 months:
In the lace trade employment remains bad, and short-time is fairly general.
The hon. Member for East Nottingham gave figures from which we were to draw the conclusion that there had been a very considerable decline in unemployment. What was the state of things in January of this year? I find from the "Ministry of Labour Gazette" that in January of this year there were 2,843 persons either wholly unemployed or temporarily unemployed. The hon. Member said there were
something like 20,000 persons employed in the industry. I would ask him to reconcile that statement with the figures given by Mr. Lichfield in his annual review of the lace trade published in the "Nottingham Guardian" at the beginning of this year. Mr. Lichfield said there that on 26th January, 1926, the number of persons engaged in the lace industry was 15,731. The figure given by the hon. Member was 20,000. According to the "Ministry of Labour Gazette," in January, 1925—that was six months before the duties were imposed—the number of persons employed in the industry was 20,330. According to Mr. Lichfield's figures, after 18 months' experience of the operation of the duty the figure had fallen from 20,000 to 15,731.
Let us take what are one or two other, to my mind, still more important points in this controversy. Again I am quoting from Mr. Lichfield's annual report. He says that on 30th September, 1925, that is, after the duty had been in operation for three months only, the number of racks produced was 296, and in September, 1926, the production had fallen to 282. Throughout the whole of this review Mr. Lichfield admits that there has been a decline in the total output. It is estimated that it amounts to something like 14 per cent. But there is another very important factor in the situation. Surely if these safeguarding duties are to justify themselves they must not only increase employment, which, as I have shown from these figures, this particular duty has not done, but must increase the volume of output, which, as I have also shown from these figures, it has not done, and, from the point of view of the work-people, the duty must raise wages.
Neither of the hon. Members from Nottingham who has spoken has said a word about wages. Let me give Mr. Lichfield's figures. Mr. Lichfield is a defender of the safeguarding duties. His article was written to a very great extent to justify the imposition of these duties. In regard to the wages what does he say? On 30th September, 1925, that is, just after the duty had been imposed, he says the average of wages and salaries was £27 15s. l1d., but that after 12 months' further experience of safeguarding wages and salaries had fallen to an average of
£26 7s. [HON. MEMBERS: "For what periods?"] He says:
Wages and salaries paid per machine £36 13s. 11d. at the former period and £33 7s.—
it is per employé in the former instance I have quoted.

Sir B. CHADWICK: The figures which have just been given by the right hon. Gentleman show an extraordinary discrepancy in regard to the number of people employed. The right hon. Gentleman stated that the figures at the end of 1926 showed that there were only 15,000 employed. My figures show 19,000, and that is an extraordinary difference.

Mr. SNOWDEN: The "Labour Gazette" does not give the number actually unemployed. That publication did give those figures in previous years, but for some reason the "Labour Gazette" has ceased to give the number of employed. The number of unemployed at the end of July, 1926, was 12 per cent. of those actually engaged in the industry. I need add nothing to what has been said with regard to the fall in the export trade, but I may call the attention of hon. Members opposite to an argument which was put forward with very great force in former Debates, namely, that if this trade could obtain protection in the home markets it would greatly strengthen its position in regard to the export market, because the trade would be able to keep its machinery fully employed, thus reducing overhead charges and the cost of production, and it would also at the same time strengthen its position in the world market.
What has been our experience in connection with the safeguarding of the lace industry? The figures on this point are quite clear. An attempt has been made by the Parliamentary Secretary to try to minimise the seriousness of the fall in the export trade by referring to values. I am ready to concede something on that ground, but if the hon. Gentleman will get his statisticians to work out the percentages of the fall in the price of raw material, he will find out that it amounts to about 12 per cent., and therefore, at the most, the fall can only account for 12 per cent. of the 27 per cent. fall in the exports. Apart from the hon. Member's reference to the fall of values, perhaps he will explain why there has been this enormous fall in the export trade. Is the
hon. Gentleman aware of the very important fact that three-quarters of the output of the Nottingham lace trade was formerly an export trade? No less than 73 per cent. of the trade was done abroad, and 27 per cent. was done in the home market. Let us analyse those figures, and we shall see what has been lost by the imposition of these safeguarding proposals. Take a unit of production of 100 before the duty was imposed. No less than 73 per cent. of that went abroad, and 27 per cent. was retained at home. Now only 56 per cent. is exported, where 73 per cent. was formerly exported.
Even if we concede the contention of those who support the argument that these proposals have produced a larger consumption of home manufactures in the home market, what does it mean? It simply means that they have raised the former 27 per cent. in the home market to a little over 30 per cent. on a smaller output. Therefore, they have gained £5 in the home market and lost £18 in the export market. No wonder the "Nottingham Guardian" deplores the terrible condition of the lace trade. There has not been a single fact brought forward in the course of this Debate to justify the operation of these duties, which have almost ruined the export trade which used to be the mainstay of the Nottingham lace industry. These duties have encouraged foreign competition. An hon. Member quoted figures to show how German lace manufacturers were increasing their trade in our Colonial markets, a trade which the operation of these safeguarding duties has lost to the Nottingham lace manufacturers. Two years ago I sat upon a Committee of Inquiry into the wages paid in the Yorkshire textile trade, and we were told that Canadian buyers do not come here but they go straight to Paris to make their purchases. The reason they do this is that in the Bradford trade papers the Bradford manufacturers have been stating that they cannot compete with the French. This information has been broadcast, and naturally our former customers say, "Why should we not act upon the information which you have given us, and go to what you admit is a 30 per cent. cheaper market?"
That is what has happened in the Nottingham lace trade. It has been
broadcast that our lace manufacturers cannot compete with Germany. That information has come to the knowledge of lace buyers all over the world, with the result that they are now going direct to Germany and Paris for their purchases, and that must be the inevitable consequence of crying stinking fish, to use a rather vulgar expression. Two years' experience of our trade under these duties has definitely proved that the effect has been to dissipate trade, and instead of helping industry they are ruining it. The operation of these duties has reduced wages, and they certainly have not increased the volume of trade. It has not yet been proved that there has been any large increase in consumption in the home market on account of these duties. For all these devastating reasons, I ask the House to support this new Clause.

Mr. ROY WILSON: I really cannot allow the statement which has just been made by the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) to pass unchallenged. Speaking of the curtain industry in Nottingham, the right hon. Gentleman told the House that these duties have certainly not helped the curtain trade.

Mr. SNOWDEN: I did not make that statement. The only reference to the curtain trade which I made was simply to quote from the "Trade Review" in the "Times" of Saturday last, in which it is stated that there has been a little stimulus given to the curtain branch of the trade by a change of fashion.

Mr. WILSON: I do not wish to misrepresent the right hon. Gentleman, and if he did not say that the curtain trade had suffered by these duties then I will not pursue that argument. The right hon. Gentleman certainly said that not one single fact had been put forward to justify these duties. I am going to give some facts which I hope the House will realise fully justify these duties. At a certain London hotel of which I happen to be a director, we have had to consider estimates for the supply or renewal of a considerable number of lace curtains. In the past these curtains have always been obtained from a manufacturer on the Continent. This year, as the result of these duties, the board of
this hotel decided to submit the samples for these curtains to a well-known firm of manufacturers in Nottingham. I am pleased to tell the House, and hon. Members may rest assured that it is a fact, that this considerable order for lace curtains went to the Nottingham firm who were able, by reason of these duties, to quote a much better price than the firm on the Continent who hitherto had been supplying those curtains. I am quite satisfied from inquiries that this is only one example of how these duties in course of time will prove of great advantage to manufacturers in Nottingham.

Mr. KELLY: I should not have taken part in this Debate but for the figures which I heard quoted in the earlier part of this discussion. As one who has to meet the net and lace manufacturers of this country, I have been astounded this afternoon to hear how well employed the operatives are said to be in that trade. I can assure the hon. Member who has just quoted some figures that that is not the tale told by those engaged in the trade. I have inquired, and I can assure the House that while I have not got the figures, I have been told that those engaged in the industry are working short time, and even shorter hours than they were working last year and the year before. I have been surprised to notice that hon. Members representing the lace districts have not stood up in support of these safeguarding proposals this afternoon. I have been waiting to hear some hon. Member representing Somerset, which is a large lace manufacturing district, or someone representing Derby or Long Eaton, who is prepared to say a word for these duties, but not one voice has come from those parts of the country in favour of these duties.
With regard to wages, figures have been quoted dealing with a number of people who were working full time. I would like to know if the machines in those instances were working double shifts, or was it merely that a certain number of people have passed through the gates of the factory to the extent that was given to us this afternoon without any regard to the number of hours worked or the wages received? Wages in the lace trade have not increased, and they are so deplorable that I cannot
understand how the people manage to live upon them. The last speaker quoted the case of an hotel which has now begun to buy British goods. I would urge hon. Members opposite to impress upon the Members of the Front Bench the importance of doing the same thing in regard to the purchases of their Departments. I think somebody ought to impress upon the India Office that they can very well purchase the goods they need from factories in this country without having to go to the Continent. If it is to be suggested that safeguarding is responsible for hotel companies buying English curtains, at least some attempt should be made to prove that statement. Speaking on behalf of some of the operatives in the lace trade, I assert that they have not benefited by the Safeguarding Duties, and they have certainly had no advantage from their operation.

Mr. DENNISON: I should like to tell the House of an experience that I had only this year, when, with 10 other Members of the House, I visited Malta with the delegation of the Empire Parliamentary Association. With one or two colleagues, I met the representatives of the Maltese lace manufacturers, who complained very bitterly indeed about the effects of this safeguarding duty on that part of the Empire. I should have expected that during the discussion this afternoon we should have heard something from hon. Members on the opposite side of the House, who are usually shouting in the interests of Empire, by way of a plea for these poor people in that part of the Empire. I understand that something like £10,000 worth of Maltese lace was imported into this country during the year before the imposition of this duty, in 1925, while in 1926 the value of the imports was reduced to something slightly in excess of £2,000. That is a very serious matter to people in whom we claim to have some interest, and, surely, even if this proposed new Clause be rejected, the Chancellor of the Exchequer, or those who represent the Treasury in this matter, might give serious consideration to the loss which is thus inflicted on an Island that is inhabited by our own people, who have no great opportunities of expansion, but who are practically confined to this industry for the purposes of earning their
living. The type of lace which they manufacture is a peculiar type, and there is no justification for imposing upon it so severe a tax. I know that some preference is given, but I trust that, if the Clause be not agreed to, at any rate consideration will be given to the matter.

Mr. MACKINDER: It would have been interesting if the hon. Member for Lichfield (Mr. Roy Wilson) had given us just a little more information with reference to the hotel he quoted, the managers of which, through safeguarding, were made patriotic to the extent of purchasing British goods. I do not know whether the hon. Member has, or could get, the information, but it would be interesting to know what were the British prices for lace at the time when that contract was given to foreign manufacturers, and what was the price at which the British manufacturers got the contract afterwards.

Mr. ROY WILSON: I did not happen to be a director of the hotel at the time when they were purchasing from abroad.

Mr. MACKINDER: I am interested to know that, at any rate, one Member of the House has had some opportunity of making people patriotic. It would be interesting to know—I do not say it in a bad spirit—at what price the British lace was offered before the imposition of the safeguarding duty, and at what price the contract was actually given, because some of us have a suspicion, although we are told that it is ill-founded, that, when a 33⅓ per cent. duty is put on goods coming from abroad, the price does increase to an almost corresponding extent. Personally, I think that that is bound to be the case.

Lord HUNTINGFIELD: The prices of motor-cars have not increased.

Mr. MACKINDER: I am talking about the goods that are bought by average members of the working classes, such as curtains, and so on. Average people of the working class do not indulge in either British or foreign motor-cars, but the majority of them do indulge in curtains, whether of British or foreign manufacture, because they have to buy them. It would be interesting to know if they buy British goods because the price of the foreign goods has been in-
creased as the result of safeguarding. We are often told that it is not increased to anything like a relative amount, and it would be very interesting if the hon. Member could look into the records and tell us in some future Debate whether the British goods went up in price as the result of the falling off in supplies from foreign sources.

Commander WILLIAMS: A really interesting figure has been given from the other side of the House, and I think it deserves a word of comment. We have been told quite clearly that the importation of Maltese lace went down from £10,000 to approximately £2,000. I willingly accept those figures, in spite of the fact that I believe the Maltese have a preference of one-third on any of their goods that come into this country. If that be what is happening in the case of

Malta, where there as a preference—and, as far as I am concerned, and, I believe, as far as my party is concerned, we would wish to see the preference increased if it could help the Maltese—if that be what is happening where there is a preference, then what is the value of the rigmarole of figures that was given by the ex-Chancellor of the Exchequer just now? From the illustration that we have had from the other side, it must inevitably happen sooner or later that other countries must lose their trade with this country, greatly to the benefit of our own manufacturers, and particularly our working people.

Mr. DENNISON: I would point out that Maltese lace is only made in Malta.

Question put, "That the Clause be read a Second time."

The House divided: Ayes, 104; Noes, 254.

Division No. 266.]
AYES.
[5.53 p.m.


Adamson, Rt. Hon. W. (Fife, West)
Graham, Rt. Hon. Wm. (Edln., Cent.)
Paling, W.


Adamson, W. M. (Staff., Cannock)
Greenall, T.
Pethick-Lawrence, F. W.


Alexander, A. V. (Sheffield., Hillsbro')
Greenwood, A. (Nelson and Colne)
Ponsonby, Arthur


Ammon, Charles George
Grenfell, D. R. (Glamorgan)
Potts, John S.


Attlee, Clement Richard
Griffiths, T. (Monmouth, Pontypool)
Purcell, A. A.


Baker, J. (Wolverhampton, Bilston)
Grundy, T. W.
Richardson, R. (Houghton-le-Spring)


Baker, Walter
Hall, F. (York, W. R., Normanton)
Ritson, J.


Barness, A.
Hall, G. H. (Merthyr Tydvil)
Runciman, Rt. Hon. Walter


Batey, Joseph
Hamilton, Sir R. (Orkney & Shetland)
Salter, Dr. Alfred


Beckett, John (Gateshead)
Hardie, George D.
Scurr, John


Bondfield, Margaret
Harney, E. A.
Shaw, Rt. Hon. Thomas (Preston)


Bowerman, Rt. Hon. Charles W.
Harris, Percy A.
Sitch, Charles H.


Briant, Frank
Hartshorn, Rt. Hon. Vernon
Smillie, Robert


Broad, F. A.
Henderson, Rt. Hon. A. (Burnley)
Smith, Ben (Bermondsey, Rotherhithe)


Brown, Ernest (Leith)
Hirst, G. H.
Smith, H. B. Lees (Keighley)


Brown, James (Ayr and Bute)
Hirst, W. (Bradford, South)
Smith, Rennie (Penistone)


Buchanan, G.
Hore-Belisha, Leslie
Snell, Herry


Cape, Thomas
Hutchison, Sir Robert (Montrose)
Snowden, Rt. Hon. Phillip


Charleton, H. C.
John, William (Rhondda, West)
Spoor, Rt. Hon. Banjamin Charles


Clynes, Rt. Hon. John R.
Jones, Henry Haydn (Merioneth)
Stamford, T. W.


Compton, Joseph
Jones, Morgan (Caerphilly)
Sutton, J. E.


Connolly, M.
Kelly, W. T.
Thomas, Rt. Hon. James H. (Derby)


Cove, W. G.
Kennedy, T.
Thorne, W. (West Ham, Plaistow)


Cowan, D. M. (Scottish Universities)
Lansbury, George
Thurtle, Ernest


Crawfurd, H. E.
Lawrence, Susan
Townend, A. E.


Dalton, Hugh
Lee, F.
Trevelyan, Rt. Hon. C. P.


Davies, Ellis (Denbigh, Denbigh)
Lunn, William
Viant, S. P.


Davies, Rhys John (Westhoughton)
MacDonald, Rt. Hon. J. R. (Aberavon)
Wilkinson, Ellen C.


Day, Colonel Harry
Mackinder, W.
Williams, Dr. J. H. (Lianelly)


Dennison, R.
MacLaren, Andrew
Williams, T. (York, Don Valley)


Duncan, C.
Maclean, Nell (Glasgow, Govan)
Wilson, C. H. (Sheffield, Attercliffe)


Dunnico, H.
Maxton, James
Windsor, Walter


Edwards, J. Hugh (Accrington)
Montague, Frederick



Forrest, W.
Morrison, R. C. (Tottenham, N.)
TELLERS FOR THE AYES—


Gardner, J. P.
Naylor, T. E.
Mr. Allen Parkinson and Mr.


Gillett, George M.
Oliver, George Harold
Whiteley.


NOES.


Acland-Troyte, Lieut.-Colonel
Balniel, Lord
Bourne, Captain Robert Croft


Agg-Gardner, Rt. Hon. Sir James T.
Banks, Reginald Mitchell
Brass, Captain W.


Albery, Irving James
Barnett, Major Sir Richard
Briggs, J. Harold


Alexander, Sir Wm. (Glasgow, Cent'l)
Beamish, Rear-Admiral T. P. H.
Brocklebank, C. E. R.


Allen, Lieut.-Col. Sir William James
Bennett, A. J.
Broun-Lindsay, Major H.


Amery, Rt. Hon. Leopold C. M. S.
Bentinck, Lord Henry Cavendish-
Brown, Brig.-Gen. H. C. (Berks, Newb'y)


Ashley, Lt.-Col. Rt. Hon. Wilfrid W.
Betterton, Henry B.
Buchan, John


Baldwin, Rt. Hon. Stanley
Birchall, Major J. Dearman
Buckingham, Sir H.


Balfour, George (Hampstead)
Boothby, R. J. G.
Bull, Rt. Hon. Sir William James


Burney, Lieut.-Com. Charles D.
Hannon, Patrick Joseph Henry
Perring, Sir William George


Burton, Colonel H. W.
Harrison, G. J. C.
Peto, Sir Basil E. (Devon, Barnstaple)


Butler, Sir Geoffrey
Hartington, Marquess of
Peto, G. (Somerset, Frome)


Cadogan, Major Hon. Edward
Harvey, G. (Lambeth, Kennington)
Pilcher, G.


Calne, Gordon Hall
Hawke, John Anthony
Pilditch, Sir Philip


Campbell, E. T.
Headlam, Lieut.-Colonel C. M.
Pownall, Sir Assheton


Cautley, Sir Henry S.
Heneage, Lieut.-Colonel Arthur P.
Price, Major C. W. M.


Cayzer, Sir C. (Chester, City)
Herbert, Dennis (Hertford, Watford)
Raine, Sir Walter


Cazalet, Captain Victor A.
Hills, Major John Waller
Rawson, Sir Cooper


Cecil, Rt. Hon. Sir Evelyn (Aston)
Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.
Reid, D. D. (County Down)


Chadwick, Sir Robert Burton
Hogg, Rt. Hon. Sir D. (St. Marylebone)
Remnant, Sir James


Chamberlain, Rt. Hon. N. (Ladywood)
Hohler, Sir Gerald Fitzroy
Rentoul, G. S.


Charteris, Brigadier-General J.
Holt, Capt. H. P.
Rhys, Hon. C. A. U.


Christie, J. A.
Hope, Capt. A. O. J. (Warw'k, Nun.)
Rice, Sir Frederick


Churchill, Rt. Hon. Winston Spencer
Hope, Sir Harry (Forfar)
Richardson, Sir P. W. (Sur'y, Ch'ts'y)


Churchman, Sir Arthur C.
Hopkins, J. W. W.
Roberts, Sir Samuel (Hereford)


Clarry, Reginald George
Hopkinson, Sir A. (Eng. Universities)
Ropner, Major L.


Cobb, Sir Cyril
Hudson, Capt. A. U. M. (Hackney, N.)
Russell, Alexander West (Tynemouth)


Cochrane, Commander Hon. A. D.
Hume, Sir G. H.
Rye, F. G.


Cockerill, Brig.-General Sir George
Hume-Williams, Sir W. Ellis
Salmon, Major I.


Colman, N. C. D.
Hunter-Weston, Lt.-Gen. Sir Aylmer
Samuel, A. M. (Surrey, Farnham)


Cooper, A. Duff
Huntingfield, Lord
Sandeman, N. Stewart


Cope, Major William
Hurst, Gerald B.
Sanders, Sir Robert A.


Couper, J. B.
Inskip, Sir Thomas Walker H.
Sandon, Lord


Courtauld, Major J. S
Jackson, Sir H. (Wandsworth, Cen'l)
Sassoon, Sir Philip Albert Gustave D.


Cowan, Sir Wm. Henry (Islingin. N.)
James, Lieut.-Colonel Hon. Cuthbert
Savery, S. S.


Craig, Capt. Rt. Hon. C. C. (Antrim)
Jones, G. W. H. (Stoke Newington)
Scott, Rt. Hon. Sir Leslie


Craig, Sir Ernest (Chester, Crewe)
Kennedy, A. R. (Preston)
Sheffield, Sir Berkeley


Croft, Brigadier-General Sir H.
Kindersley, Major Guy M.
Simms, Dr. John M. (Co. Down)


Crooke, J. Smedley (Deritend)
King, Commodore Henry Douglas
Skelton, A. N.


Crookshank, Col. C. de W. (Berwick)
Kinloch-Cooke, Sir Clement
Smith-Carington, Neville W.


Crookshank, Cpt. H. (Lindsey, Gainsbro)
Knox, Sir Alfred
Smithers, Waldron


Cunliffe, Sir Herbert
Lamb, J. Q.
Somerville, A. A. (Windsor)


Curzon, Captain Viscount
Lane Fox, Col. Rt. Hon. George R.
Spender-Clay, Colonel H.


Dalkeith, Earl of
Lister, Cunliffe-, Rt. Hon. Sir Philip
Sprot, Sir Alexander


Davies, Maj. Geo. F. (Somerset, Yeovil)
Locker-Lampson, G. (Wood Green)
Stanley, Lieut.-Colonel Rt. Hon. G. F.


Davies, Dr. Vernon
Loder, J. de V.
Stanley, Hon. O. F. G. (Westm'eland)


Davison, Sir W. H. (Kensington, S.)
Long, Major Eric
Steel, Major Samuel Strang


Dawson, Sir Philip
Looker, Herbert William
Storry-Deans, H.


Dean, Arthur Wellesley
Lucas-Tooth, Sir Hugh Vere
Stuart, Hon. J. (Moray and Nairn)


Dixey, A. C.
Lumley, L. R.
Styles, Captain H. Walter


Drewe, C.
Macdonald, R. (Glasgow, Cathcart)
Sueter, Rear-Admiral Murray Fraser


Eden, Captain Anthony
McDonnell, Colonel Hon. Angus
Tasker, R. Inigo.


Edmondson, Major A. J.
MacIntyre, Ian
Templeton, W. P.


Elliot, Major Walter E.
McLean, Major A.
Thompson, Luke (Sunderland)


Ellis, R. G.
Macmillan, Captain H.
Thomson, Rt. Hon. Sir W. Mitchell-


Elveden, Viscount
Macnaghten, Hon. Sir Malcolm
Titchfield, Major the Marquess of


Erskine, Lord (Somerset, Weston-s-M.)
McNeill, Rt. Hon. Ronald John
Tryon, Rt. Hon. George Clement


Evans, Captain A. (Cardiff, South)
Macquisten, F. A.
Turton, Sir Edmund Russborough


Everard, W. Lindsay
MacRobert, Alexander M.
Vaugnan-Morgan, Col. K. P.


Fairfax, Captain J. G.
Making, Brigadier-General E.
Wallace, Captain D. E.


Falle, Sir Bertram G.
Malone, Major P. B.
Ward, Lt.-Col. A. L. (Kingston-on-Hull)


Fermoy, Lord
Manningham-Buller, Sir Mervyn
Warrender, Sir Victor


Fielden, E. B.
Margesson, Captain D.
Waterhouse, Captain Charles


Forestier-Walker, Sir L.
Marriott, Sir J. A. R.
Watson, Rt. Hon. W. (Carlisle)


Foxcroft, Captain C. T.
Meller, R. J.
Wells, S. R.


Fraser, Captain Ian
Meyer, Sir Frank
White, Lieut.-Col Sir G. Dairymple


Fremantle, Lieut.-Colonel Francis E
Milne, J. S. Wardlaw-
Williams, A. M. (Cornwall, Northern)


Galbraith, J. F. W.
Mitchell, S. (Lanark, Lanark)
Williams, Com. C. (Devon, Torquay)


Ganzoni, Sir John
Mitchell, W. Foot (Saffron Walden)
Williams, Herbert G. (Reading)


Gates, Percy
Mitchell, Sir W. Lane (Streatham)
Wilson, R. R. (Stafford, Lichfield)


Gibbs, Col. Rt. Hon. George Abraham
Monsell, Eyres, Com. Rt. Hon. B. M.
Winby, Colonel L. P.


Glyn, Major R. G. C.
Moore, Lieut.-Colonel T. C. R. (Ayr)
Windsor-Clive, Lieut.-Colonel George


Goff, Sir Park
Moore-Brabazon, Lieut.-Col. J. T. C.
Winterton, Rt. Hon. Earl


Gower, Sir Robert
Moreing, Captain A. H.
Wise, Sir Fredric


Grace, John
Morrison, H. (Wilts, Salisbury)
Withers, John James


Grant, Sir J. A.
Nail, Colonel Sir Joseph
Wolmer, Viscount


Grattan-Doyle, Sir N.
Nelson, Sir Frank
Womersley, W. J.


Greaves-Lord, Sir Walter
Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld.)
Wood, Sir Kingsley (Woolwich W.)


Greene, W. P. Crawford
Nield, Rt. Hon. Sir Herbert
Wood, Sir S. Hill- (High Peak)


Grenfell, Edward C. (City of London)
Nuttall, Ellis
Worthington-Evans, Rt. Hon. Sir L.


Grotrian, H. Brent
Oakley, T.
Wragg, Herbert


Gunston, Captain D. W.
O'Neill, Major Rt. Hon. Hugh
Young, Rt. Hon. Sir Hilton (Norwich)


Hacking, Captain Douglas H.
Ormsby-Gore, Rt. Hon. William



Hall, Lieut.-Col. Sir F. (Dulwich)
Penny, Frederick George
TELLERS FOR THE NOES—


Hall, Capt. W. D'A. (Brecon & Rad.)
Percy, Lord Eustace (Hastings)
Mr. F. C. Thomson and Captain


Hanbury, C.
Perkins, Colonel E. K.
Bowyer.

NEW CLAUSE.—(Amendment of 8 and 9 Geo. V., c. 15.)

"(1) One penny shall be substituted for twopence in Sub-section (1) of Section thirty-six of the Finance Act, 1918.

(2) Sub-sections (2) and (3) of Section thirty-six of the Finance Act, 1918, are hereby repealed."—[Captain Bourne.]

Brought up, and read the First time.

Captain BOURNE: I beg to move, "That the Clause be read a Second time."
I wish to apologise to the House for the form in which this Clause appears, but I found it almost impossible to draft a Clause which would be in Order and, at the same time, intelligible. The effect would be to reduce the Stamp Duty on cheques from 2d. to 1d. I have brought the Clause forward because I feel that this question has been stimulated this year by the proposed act of the Midland Bank in introducing stampless cheques in the form of receipts for amounts under £2. I understand the question is to come before the Courts but, as the matter has been brought into publicity, it is only fair that we should have some statement from the Government as to their intentions, and I have put down the Clause for that purpose. There is one respect in which, it seems to me, conditions have altered considerably since 1918, when the duty was increased. Since then we have gone back to the gold currency, and one effect of that has been that the total amount of currency notes now in circulation is reduced by something like £40,000,000.
One effect of basing your currency on gold, and at the same time reducing the amount of currency, is to cause a depression in prices, and there is a certain gap between the drop in prices and the adjustment of industry to the new conditions which operates as a hardship on producers, and more especially on the great industry of agriculture. I believe the use of small cheques would increase the amount of currency in circulation, because I believe a great deal of unnecessary currency is now withdrawn from the banks in order to pay very small bills, because people have a prejudice against writing a cheque with a twopenny stamp for an amount under £2, and anything that would help to give us a greater volume of currency would be an advantage. I know my right hon. Friend cannot accept the Clause, but I should like to ask whether he could not consult with the banks between now and next year, and see if it might not be possible to introduce a penny cheque on amounts under £2.

Brigadier-General CLIFTON BROWN: I beg to second the Motion.

Mr. CHURCHILL: Alexander the Great said the people of Asia were slaves because they could not pronounce the word "No," but the Government on this occasion must be careful not to display such a lamentable disability. The cost of this Clause would amount to £1,500,000 in a full year, and that is not a figure that I can possibly contemplate if the Budget of next year is to be balanced. Everyone would like to see the Cheque Tax and other taxes reduced, but the circumstances of the time do not permit us to think of such an indulgence. Every tax is a burden, and only the hard conditions of the times in which we live have forced the evil upon us. I should very much like to reduce the Stamp Duty on cheques from 2d. to 1d. I have examined with interest a proposal to reduce the Stamp Duty on cheques for amounts under £2 to 1d., but there is no doubt it would be very expensive. Calculations which have been called for show that, although there might be an increase in the use of the penny cheque, that would by no means compensate for the diminution in the yield of the cheque on which 2d. was charged, and a loss of, I think, £500,000 a year would be the least we could expect if we were to have two kinds of cheques, one for 2d. and the other, under £2, for 1d.
There is also the argument about the inconvenience of double cheque books and so on, but I do not attach much importance to that, because if anyone had a right to write a cheque with a penny stamp upon it and chose, for the matter of convenience, to write it in his cheque book which contained only 2d. stamps, that would not be a matter which the Inland Revenue would be called upon to deplore. But the argument against all these reductions is that we have not got the money, and that is the argument, and the only one, on which I rest. I am told it is a mistake in dialectics ever to use more arguments in support of a proposal than are necessary to prove it conclusively, and I therefore confine myself solely and entirely to the argument that, desirable as it is to reduce all taxes, and especially desirable as it may be in present circumstances to reduce the duty on cheques, all such schemes are, at present, equally beyond my powers.

Mr. W. GRAHAM: The hon. and gallant Gentleman has raised a question
which must be of very great interest to Members in all parts of the House irrespective of our political views, and while, of course, to-day we expect no other answer from the Chancellor of the Exchequer, I very much hope that further inquiries will be made into this question during the coming year. Various financial authorities, and large numbers of people who are not connected with finance at all, have urged that there are many gains in the public interest to be derived from a much wider use of the cheque. Of course the use of the cheque has expanded enormously within recent times, but the practical importance of this question turns not merely upon the additional security of this form of monetary transaction, but also upon such economy as we can achieve with the gold currency, if ever this country sees a gold currency again, or even in the note issue—the £1 and 10s. notes upon which we so largely depend. First of all there is the question of security in this wider distribution of the use of the cheque, and, secondly, there is this question of economy to the State itself, which is one of the factors the Chancellor of the Exchequer must take into account. I have heard it argued in recent times that even if this cost £1,500,000 there might be very substantial gains in other directions, but in so far as there has been evidence at all on the part of the Mint and other authorities before the Public Accounts Committee, and under any other forms of investigation, no very definite result has emerged. Looking to the fact that this is a question in which the whole country is interested, I think the right hon. Gentleman might very well hold out a rather more practical hope to-day, and accordingly if the Financial Secretary has any additional information to give us as to what form an inquiry might take we shall be very glad to have it.
There is, of course, a case on the other side. Large numbers of people say that we have much to gain by the additional Security of this form of transaction. I have also heard it argued that the use of the cheque contributes to a certain prodigality of expenditure, but I do not attach very much importance to that class of argument, because everything turns upon security and upon possible economy to the State. I should be very glad indeed if the Financial Secretary would
tell us about the form of inquiry which must almost immediately be made into this question, because I do not see how we are going to approach the consideration not only of gold currency, but perhaps of the fusion of the Bank of England note issue and the currency note issue, without looking to very much wider problems, of which this extended use of the cheque by a diminution of the duty on it is one that must be regarded as important.

Question, "That the Clause be read a Second time," put, and negatived.

Mr. DEPUTY-SPEAKER (Captain FitzRoy): Brigadier-General Clifton Brown.

Brigadier-General BROWN: In view of the assurance given me by my right hon. Friend that it will be time in next year's Budget to consider this matter, and in view of the fact that the Government will consider it, I do not propose to move the new Clause standing on the Order Paper in the names of my hon. and gallant Friend the Member for Rye (Sir G. Courthope) and myself—("Continuance of s. 28 (Amendment as to allowance for repairs) of The Finance Act, 1923)."

Sir HENRY CAUTLEY: Will the Chancellor of the Exchequer explain how it will be in time for the next Budget? I will move the Clause so that we may have his explanation on record.

Mr. DEPUTY-SPEAKER: It is out of order to debate the question without any question before the House.

Sir H. CAUTLEY: I move it.

Mr. DEPUTY-SPEAKER: I am afraid the hon. and learned Gentleman cannot move it without giving notice.

Brigadier-General BROWN: May I change my mind?

NEW CLAUSE.—(Continuance of s. 28 (Amendment as to allowance for repair) of The Finance Act, 1923.)

"Section twenty-eight (Amendment as to allowance for repairs) of the Finance Act, 1923, shall continue to have effect until the fifth day of April, nineteen hundred and thirty-three, on which day, unless Parliament otherwise determines, it shall cease to have effect."—[Brigadier-General Brown.]

Brought up, and read the First time.

Brigadier-General BROWN: I beg to move, "That the Clause be read a Second time."

Sir H. CAUTLEY: I beg to second the Motion.

Mr. R. McNEILL: I can very shortly answer the question put by my hon. Friend. It deals with the taxation of the year 1928–29, and although it is quite true that that to which my hon. Friend refers comes to an end in April, the actual tax is not payable until the following 1st January. So there will be ample time in the Finance Bill of next year to decide what is to be done before the tax becomes payable.

Sir H. CAUTLEY: That assurance satisfies me, and I suggest that the Clause be withdrawn.

Brigadier-General BROWN: I ask leave to withdraw the Clause.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Rate of Entertainments Duty.)

"As from the thirty-first day of July nineteen hundred and twenty-seven, Entertainments Duty within the meaning of the Finance (New Duties) Act, 1916, shall be charged at the rate set out in the First Schedule to this Act."—[Colonel Day.]

Brought up, and read the First time.

Colonel DAY: I beg to move, "That the Clause be read a Second time."
The First Schedule is rather lengthy, and I do not propose to read it. Hon. Members can see the rate themselves. I suppose we shall be met by the right hon. Gentleman giving us, perhaps, a reason similar to that which he gave a few moments ago, namely, that the Government have not got the money. He might say there are many reasons, but that that is the principal one, and the others do not matter. The modifications proposed are with regard to the duty on admissions up to 5s. 6d., that is, the cheaper prices of admission at theatres, cinemas, music halls and other entertainments. These are the parts which are more hardly hit as far as the revenue is concerned in all places of amusement. Personally, I would prefer having been in the position of moving the total abolition of the whole of the Entertainments Duty,
and I am sure if the right hon. Gentleman could see his way clear to do this he would be following up the statement he made last year in the House when he said:
I share the prejudice of a great many hon. Members against the duty. However, it has come down to us from my predecessor.
That, I think, is the general idea of the majority of the Members of the House; they are more or less against the Entertainments Duty. Only two years ago many meetings were held in Committee Rooms upstairs, in which a great many Members pledged themselves to support the complete abolition of the duty. I am sure that would have been more in accord with the views of the right hon. Gentleman who originally moved the duty. On that occasion he said it was a war-time tax and one which he hoped would be discontinued at the end of the War or at least a few years afterwards. It is clearly intended that the duty should end and not that it should be a continuous duty. Every Chancellor of the Exchequer since the introduction of the duty has been more or less against it, as it was considered to be a bad duty. Even the present Chancellor expressed a strong opinion upon it about two years ago, when he said, "I am strongly in favour of the abolition of the Entertainments Duty." In view of that statement, I hope we shall have his support and that of his followers in the present proposed modifications of the duty, and, perhaps, later their support for the total abolition of what is a most vexatious duty.
The late Chancellor of the Exchequer, when he agreed to certain modifications in the Entertainments Duty Clause, made it clear that in his poinion later on he would make further alterations and modifications. Unfortunately, although it was his earnest intention to do so, he had not an opportunity of introducing the Budget the following year. There can be no doubt that this duty, introduced, as it was, as a war-time duty, is a bad and a vicious duty. It is different from all other duties. It is a tax on turnover; it is not a tax on profit. The right hon. Gentleman the Financial Secretary to the Treasury, I believe, has stated that it is not very much different from the duties that are imposed on wines, cigars and other things of that kind, but the duty on the entertainment
industry is entirely different, because entertainment proprietors have to pay for their goods weekly. They have to pay for their artists, their staffs and their bands every week, whatever may be the outcome of their trade or business. If fog, or snow, or any other incident affects their business, their outgoings are exactly the same, whereas in the ordinary commercial business a man has his stock to carry over to the next week, and does not make the big loss that the entertainment proprietors do in their business. I suggest to the right hon. Gentleman, that it would be a good thing if he could see his way to honour the pledge that was given by the Chancellor of the Exchequer who originally introduced this duty. This duty has been called on many occasions a luxury duty, but if we consider the workings of it, and the way it greatly interferes with the success of what would otherwise be a very thriving industry, we can only conclude that it is nothing more or less than a vicious ditty.
The country has always accepted the principle that the wealthier people should carry the larger proportion of taxes, but with the Entertainments Duty it is just the opposite. The poorer people pay the greater percentage levied for Entertainments Duty. I mentioned a number of examples last year, and I do not think the Chancellor of the Exchequer can contradict me. The examples I gave were that those people who pay 8d. for admission have to pay a duty of 2d., which is 25 per cent. Those people who pay 9d. have to pay a duty of 2d., which is 22½ per cent. Those people who pay 1s. 4d. have to pay a duty of 4d., which is 25 per cent. Those people who pay 1s. 6d. have to pay a duty of 4d., which is 22½ per cent. If we look at the higher-priced seats, we see that those people who pay 5s. have to pay a duty of 9d., which is 14 per cent.; that those people who pay 7s. 6d. for admission have to pay a duty of 1s., which is 14 per cent., and that those people who pay 30s. for a stall at the opera or a box, pay a duty of 3s. 6d., which is only 11.6 per cent. You will see by that, that it is the poorer people who have to pay the largest proportion of the duty. Again, the proprietors and managers of the different music halls, theatres, cinemas and other places of
entertainment have to employ clerks for the purpose of making out their returns. They also have to go to the expense of having accountants to check these returns before they are sent to the Inland Revenue authorities. Also to comply with the Inland Revenue's demands, they have to take out an insurance policy as a result of which they have to pay their own insurance. As a matter of fact, they have to make themselves tax collectors for the Government. But that is not the worst part of it. They have to put up with the annoyance of visits from officials who sometimes enter at the very busiest times, and on a Saturday evening, for the purpose of inspecting the returns and to see that everything is quite in order, and that the returns and accounts have been made out—and, in some cases, to check the "house," which is a very great annoyance and inconvenience.
When the duty was introduced it was full of anomalies. Some of these have been removed. It certainly is a ridiculous position in which to place theatres and music halls when we find that cabarets, restaurants and night clubs and entertainments of the same calibre as the average music hall, using the same scenery, employing the same artists, who sing the same songs and perform the same dances, do not pay the Entertainments Duty. This is entirely unfair competition. We know that the Chancellor of the Exchequer, or the Inland Revenue Department unsuccessfully tried to bring a test case in order to make cabarets and hotels pay the duty. How farcical the position really is. Only a short time ago a massed cabaret took place at the Royal Albert Hall, lasting three hours. At this cabaret there appeared some of the finest artists in London, including many well known troupes and some of the finest bands. In respect of the one guinea, two guinea and three guinea tickets, which included supper, there was no Entertainments Duty, but the poorer people who paid 5s. and did not have supper, had to pay 9d. Entertainments Duty. That is an absurdity of the worst kind.
I suggest to the right hon. Gentleman that in cases of that kind it is not only a case of unfair competition with the music halls and theatres, for if audiences have to pay Entertainments Duty at
theatres and music halls, the duty ought to be applied all round. For instance, in the case I have just given, if the people who paid 5s. had to pay 9d. in respect of Entertainments Duty then the people who paid one guinea, two guineas or three guineas ought certainly to have been called upon to pay their proportion of the Entertainments Duty. The Chancellor of the Exchequer who introduced the duty originally said it was a device on his part to compel people who were not contributing to the revenue received from all classes to do so. It was his intention at that time to make the wealthy visitors from the Continent and America pay a slight proportion of the duty because they did not pay in other ways. It was suggested that they should pay this duty in order to contribute to our taxation. As far as the duty has worked up to the present time, there can be no doubt that our citizens have had to bear the biggest proportion. The poorer people who patronise entertainments have to pay a much larger share than the people who occupy the better seats.
There is another very great opposition to places of entertainment, and that is the broadcasting system, which was not in operation when this duty was introduced. At the present time, people who are fortunate enough to have wireless installed can, on occasion, hear some of our finest entertainments, and there is no tax which they have to pay, whereas if they went to a place of entertainment to see that performance they would be involved in tax. That is a very great opposition not only to the music halls, theatres and cinemas, but to all classes of entertainment. This duty is a tax on turn-over, and not a tax on profits. I am sure the right hon. Gentleman will agree with me that it is a very big tax. It is most oppressive, and had it not been for the remissions made when the late Chancellor of the Exchequer was in office many of the smaller places of entertainment would have long since gone into bankruptcy. The duty is, to a great extent, a tax on losses, because those people who have to pay the duty would otherwise be spending money in other forms of amusement. If the right hon. Gentleman will consider the duty carefully and realise that it is an
intolerable burden on industry he will, even if he cannot accept this Amendment this year, before the Budget is introduced next year, if possible, give that relief which it was intended should be introduced in the year following the remissions which were made by the late Chancellor of the Exchequer.
The duty, with its ramifications through business, has been to a great extent responsible for the bogus manager. As the bogus manager takes the small theatres in the country and his takings drop on account of the Entertainment Duty, his share also drops. When his share drops, it means that when Saturday comes he has not the money with which to pay the salaries of his people, and those who generally suffer the most and the quickest are the smaller salaried people. The duty means in some cases that practically 25 per cent. of his takings go to the Government, and the smaller artistes and staff have to go without their salaries. The music hall manager, the theatre manager and the cinema manager have everywhere cut down their expenses to the minimum, and there are hardly any other cuts which they can make. They have reduced the band and the staff. As is well known to many hon. Members, where previously a band used to number 16 or 18, now, in many cases, although it is not noticeable to the majority of the audience, it has been cut down to 12. The stage staff in the same way has been cut down. If the Chancellor of the Exchequer can see his way clear to put this extra money into the hands of the public so that they would have more money to spend in amusements and other ways, and the money would circulate, it would be better not only for the entertainment business, but it would create a certain amount of employment and reduce unemployment in other ways.
If you go to the opera or to the drama to see Shakesperean and other plays you have to pay the ordinary Entertainments Duty. If you go to see the Russian ballet you have to pay the ordinary Entertainments Duty, but if you see the same entertainment given at one of the West End hotels or in one of the big cabarets performed by the same people there is no Entertainments Duty to be paid. It seems to me absurd that one can hear the same people by paying one
guinea, to include supper, or £1 11s. 6d. to include supper, which in some cases is very bad, and avoid paying any Entertainments Duty, whereas if you see the same entertainment in another place you would have to pay probably 3s. or 4s. Entertainments Duty, if you paid the same amount of money for your ticket. The right hon. Gentleman will appreciate the fact that the original working of the duty was so full of anomalies that remissions have been made in regard to entertainments at agricultural shows and entertainments for charity. That means further opposition to the already existing opposition to the entertainment industry. The entertainment industry has been hit so hard that a large amount of unemployment has been created in the industry. In some places that I know of, even in a place in the West End of London, they have introduced what is called the Panotrope, which is a machine that plays with very loud gramophone effect and is used for playing as an overture a selection or a march instead of the band and orchestra.

Brigadier-General CHARTERIS: Very good.

Colonel DAY: I am glad the hon. and gallant Member appreciates it, but when he realises that it puts probably 20 men out of employment, he will see that it is not so good as he thinks it is. It is introduced to do away with the band, and in many cinemas throughout the country they are introducing this instrument for the purpose of reducing their costs for orchestras. It is simply a means for the reduction of expenditure to meet the want of revenue that would otherwise come into the house if the Entertainments Duty were reduced. The duty as at present constituted violates all the fundamental principles of finance.

Mr. BENNETT: No.

Colonel DAY: Yes, because it is a tax on turnover and not a tax on profits. If the hon. Member does not agree, I wonder how he would like the industry about which he was talking a little while ago to be taxed on turnover and not on profits. The entertainment industry is the only business in the United Kingdom that is taxed in this way, and that must violate all the fundamental principles of finance.

Mr. BENNETT: What about the Betting Duty?

Colonel DAY: The Chancellor of the Exchequer says that betting is an illegal business, and the Financial Secretary to the Treasury also gave reasons why licences should be issued to people who carry on betting, because it is an illegal business. I am sure the Chancellor of the Exchequer must agree that any taxation on turnover and not on profits, and in some cases not only on turover but in the instances I have given a tax on losses, is such that it must be a bad tax. The exemptions granted by previous Chancellors of the Exchequer on entertainments run for charities and for agricultural shows prove that entertainments run for charity and otherwise were so badly hit that the tax had to be remitted. I suggest to the Chancellor of the Exchequer that where a tax of this kind is levied it should be levied in a way that is fair throughout the entertainment industry. This duty is not fair, because the entertainment providers instead of carrying on their business in a proper, legitimate way are forced to carry on their business in a way which in any other business would be considered very unsatisfactory. I should like the attention of the right hon. Gentleman to this point because this matter is of very great importance to many people.

Mr. CHURCHILL: I have been listening with very great attention to the hon. Member. I was interrupted for a moment by the hon. Member for Central Nottingham (Mr. Bennett), who spoke to me on a matter of public business and distracted my attention for almost an inappreciable period of time from the spacious eloquence of the hon. Member.

Colonel DAY: I am very much obliged to the right hon. Gentleman for that explanation. The point to which I was directing his attention was that I hope the right hon. Gentleman, if he cannot accept this new Clause this year, will accept it next year. I can assure him there are many providers of entertainment in this country who are absolutely going from bad to worse in their business as a result of this duty. The year before last, and in previous years, more that 50 per cent. of hon. Members opposite pledged themselves to their constituents that they would vote for the
abolition of the Entertainments Duty, and in the Committee meetings to which I have referred it was agreed that pressure should be brought upon the Chancellor of the Exchequer to abolish the duty. In view of all these circumstances, I hope he will see his way to accept this new Clause.

Mr. DUNCAN: I beg to second the Motion.

Mr. CHURCHILL: The hon. Member has very rightly, I think, kept this question alive and in the public eye. I have never liked this Duty and I have admitted on previous occasions that I fully share the prejudices entertained in regard to it in many quarters. But, as the hon. Member has indicated, there is no prospect this year of my being able to make any modification in the Duty. The proposal he puts forward would cost £950,000 in the present year and £1,350,000 in a full year. As I said in regard to the last Amendment, I do not know where this money could be found, and I do not know any way in which it could be found without inflicting more hardship than is inflicted by the present Duty. I certainly sympathise with the class particularly affected by this Duty, the theatrical profession and the musicians. There is no doubt that the pressure of life has affected their prosperity and that they are passing through hard times. There is no doubt also that this Duty has not been wholly passed on to the consumer, as is the intention of a Duty of this kind, and that it has led to serious hardship on the professions concerned. That has always excited my concern.
The right hon. Gentleman the Member for Colne Valley (Mr. Snowden) when he was responsible for the national finances gave large remissions costing about £4,000,000 on the cheaper seats, and the hon. Member now proposes that these remissions should be fortified by a further reduction extending in a full year to £1,350,000; and a large percentage of this would inure in the form of a remission on the cheaper seats. I expressed my view last year that if it was possible to touch this Duty in any way the best way would be to consider some modifications upon the more expensive seats. I believe that the prices charged for the more expen-
sive seats are a fertile source from which the quality and character of the British drama is maintained, and if we were to make further remissions on the cheaper seats it would tend to encourage a movement from the higher priced seats to the cheaper, which would have the effect of robbing the theatrical profession and the drama generally of what is undoubtedly their most fertile and indispensable source of supply. These questions are purely academic because neither for the cheaper nor for the expensive seats have I the slightest modification in my power to bestow.
A more difficult argument to meet is the question of cabarets. These cabaret entertainments play an important part in our modern life. I am informed that the proceedings usually consist of a meal, either dinner or supper, a short variety entertainment, sometimes described as Midnight Follies, and dancing, with an inclusive charge for the whole. In the whole of this the only taxable element is the variety entertainment, and the Courts have held that having regard to the conditions in which such entertainments are given there is no liability for Entertainments Duty. If we amended the law so as to bring cabarets within the scope of the Entertainments Duty without including also concerts and band performances given in many restaurants during and after meals, a great anomaly would be created. You would be drawn on from one decision to another until your legislation would break into entirely new fields, and while I cannot for a moment say that the present state of the law is satisfactory in this respect I am not prepared with any solution which would mitigate these anomalies.

Mr. BECKETT: I regret that the Chancellor of the Exchequer cannot accept this Clause. I should not have risen but for the very dangerous hints which he threw out as to the manner in wich he was inclined to regard this duty. Like the right hon. Gentleman I am concerned about the quality of the entertainments that are given and the prosperity of the theatrical profession. I do not want to see any duty imposed which would make it difficult for the British people to receive the very best and most artistic form of entertainment that is possible. I would suggest to him, in view of the circumstances existing in the country at the
moment which we can hardly hope to vary very much during the next two or three years, that it is a fatal mistake to regard this duty as one solely affecting the quality of the entertainment and, therefore, one that might best be modified by a reduction at the top. I am surprised that a considerable number of hon. Members opposite do not support the Clause.
According to the speeches made on many platforms there are many advocates in this House of peace and contentment in industry on the other side, and I suggest that it is not very conducive to a satisfactory and contented state of mind that people who live in the dark and drab industrial districts of the land should know, when they go to the gallery of a music hall, that they are paying the Chancellor of the Exchequer 2d. while the people who go to the expensive cabarets and hotels in the West End of London, and pay a guinea and more, do not pay any Entertainments Duty at all. The greatest mistake this House can make at any time, and especially now, is to make it difficult for the masses of the working people of this country to get out of the drab and squalid atmosphere for a little time and forget their troubles in such brightness and cheer as they can derive from the average touring revues. I hope the Chancellor of the Exchequer will consider doing away with some portion of this duty. I am not sure that I entirely agree with its complete withdrawal, but I hope he will consider very drastic modifications of the duty from the bottom to the top, and not the other way round.
The merit of the proposal which the right hon. Gentleman has rejected is this.

that the comparatively few well-to-do people who can afford to pay the high prices charged in a few theatres are not likely to be kept away from the theatres by this duty. Those who can afford to pay 10s. 6d. for a stall or three guineas for a box are not likely to be affected by it. We have had cases of West End managers who have put up their prices from half a guinea to a guinea and, in the case of a recent production, which I am told was the world's worst, the charge was put up to three guineas and there was no difficulty in getting these expensive seats filled. The duty has not affected this class, but it is causing the most extreme discontent amongst the masses of the people. The right hon. Gentleman admits that the restaurant and hotel and cabaret situation is anomalous, and he does not know how to deal with it. I would suggest to him that it would be much better to stop taxing people on the Tyneside for the cheaper seats in the gallery of a music hall and put the duty on meals in restaurant over a figure of 7s. 6d. or 10s., or whatever figure he might consider suitable. He would raise a large part of the money which he would lose by a modification of this duty on the cheaper seats, and would cause nothing like the same amount of discontent. I hope he will consider a reduction of this duty at the bottom and do something to make entertainment a little cheaper for the masses of the people.

Question put, "That the Clause be read a Second time."

The House divided: Ayes, 114 Noes, 256.

Division No. 267.]
AYES.
[6.59 p.m.


Adamson, Rt. Hon. W. (Fife, West)
Compton, Joseph
Groves, T.


Adamson, W. M. (Staff., Cannock)
Connolly, M.
Grundy, T. W.


Alexander, A. V. (Sheffield, Hillsbro')
Cove, W. G.
Hall, F. (York, W. R., Normanton)


Ammon, Charles George
Cowan, D. M. (Scottish Universities)
Hall, G. H. (Merthyr Tydvil)


Attlee, Clement Richard
Crawfurd, H. E.
Hamilton, Sir R. (Orkney & Shetland)


Baker, J. (Wolverhampton, Bliston)
Dalton, Hugh
Hardie, George D.


Baker, Walter
Davies, Ellis (Denbigh, Denbigh)
Harney, E. A.


Beckett, John (Gateshead)
Davies, Evan (Ebbw Vale)
Harris, Percy A.


Bondfield, Margaret
Davies, Rhys John (Westhoughton)
Hartshorn, Rt. Hon. Vernon


Bowerman, Rt. Hon. Charles W.
Day, Colonel Harry
Henderson, Rt. Hon. A. (Burnley)


Briant, Frank
Dennison, R.
Henderson, T. (Glasgow)


Broad, F. A.
Duncan, C.
Hirst, G. H.


Bromley, J.
Dunnico, H.
Hirst, W. (Bradford, South)


Brown, Ernest (Leith)
Edwards, C. (Monmouth, Bedwellty)
Hore-Belisha, Leslie


Brown, James (Ayr and Bute)
Evans, Capt. Ernest (Welsh Univer.)
Hutchison, Sir Robert (Montrose)


Buchanan, G.
Gardner, J. P.
John, William (Rhondda, West)


Buxton, Rt. Hon. Noel
Gillett, George M.
Jones, Henry Haydn (Merioneth)


Cape, Thomas
Greenall, T.
Jones, Morgan (Caerphilly)


Charleton, H. C.
Greenwood, A. (Nelson and Colne)
Kelly, W. T.


Cluse, W. S.
Grenfell, D. R. (Glamorgan)
Kennedy, T.


Clynes, Rt. Hon. John R.
Griffiths, T. (Monmouth, Pontypool)
Lansbury, George


Lawrence, Susan
Purcell, A. A.
Stamford, T. W.


Lee, F.
Richardson, R. (Houghton-le-Spring)
Sullivan, J.


Lowth, T.
Ritson, J.
Sutton, J. E.


Lunn, William
Runciman, Rt. Hon. Walter
Thorne, W. (West Ham, Plalstow)


MacDonald, Rt. Hon. J. R. (Aberavon)
Salter, Dr. Alfred
Thurtle, Ernest


Mackinder, W.
Scurr, John
Townend, A. E.


Maclean, Nell (Glasgow, Govan)
Shaw, Rt. Hon. Thomas (Preston)
Trevelyan, Rt. Hon. C. P.


Maxton, James
Shepherd, Arthur Lewis
Varley, Frank B.


Montague, Frederick
Sinclair, Major Sir A. (Caithness)
Viant, S. P.


Morrison, R. C. (Tottenham, N.)
Sitch, Charles H.
Westwood, J.


Mosley, Oswald
Slesser, Sir Henry H.
Wiggins, William Martin


Murnin, H.
Smillle, Robert
Wilkinson, Ellen C.


Oliver, George Harold
Smith, Ben (Bermondsey, Rotherhithe)
Williams, Dr. J. H. (Lianelly)


Paling, W.
Smith, H. B. Lees- (Keighley)
Williams, T. (York, Don Valley)


Parkinson, John Allen (Wigan)
Smith, Rennie (Penistone)
Windsor, Walter


Pethick-Lawrence, F. W.
Snell, Harry



Ponsonby, Arthur
Snowden, Rt. Hon. Philip
TELLERS FOR THE AYES—


Potts, John S.
Spoor, Rt. Hon. Benjamin Charles
Mr. Whiteley and Mr. A. Barnes.


NOES.


Acland-Troyte, Lieut.-Colonel
Dalkeith, Earl of
Hurst, Gerald B.


Albery, Irving James
Davies, Maj. Geo. F. (Somerset, Yeovil)
Inskip, Sir Thomas Walker H.


Alexander, Sir Wm. (Glasgow, Cent'l)
Davies, Dr. Vernon
Jackson, Sir H. (Wandsworth Cen'l)


Allen, Lieut.-Col. Sir William James
Davison, Sir W. H. (Kensington, S.)
James, Lieut.-Colonel Hon. Cuthbert


Ashley, Lt.-Col. Rt. Hon. Wilfrid W.
Dawson, Sir Philip
Jones, G. W. H. (Stoke Newington)


Atholl, Duchess of
Dean, Arthur Wellesley
Kennedy, A. R. (Preston)


Baldwin, Rt. Hon. Stanley
Dixey, A. C.
Kindersley, Major G. M.


Balfour, George (Hampstead)
Drewe, C.
King, Commodore Henry Douglas


Balniel, Lord
Eden, Captain Anthony
Kinloch-Cooke, Sir Clement


Banks, Reginald Mitchell
Edmondson, Major A. J.
Knox, Sir Alfred


Barclay-Harvey, C. M.
Elliot, Major Walter E.
Lamb, J. Q.


Barnett, Major Sir Richard
Ellis, R. G.
Lane Fox, Col. Rt. Hon. George R.


Beamish, Rear-Admiral T. P. H.
Elveden, Viscount
Lister, Cunliffe, Rt. Hon. Sir Phil'p


Bentinck, Lord Henry Cavendish-
Evans, Captain A. (Cardiff, South)
Loder, J. de V.


Betterton, Henry B.
Fairfax, Captain J. G.
Long, Major Eric


Bird, E. R. (Yorks, W. R., Skipton)
Falle, Sir Bertram G.
Looker, Herbert William


Boothby, R. J. G.
Fermoy, Lord
Lougher, Lewis


Bourne, Captain Robert Croft
Fielden, E. B.
Lucas-Tooth, Sir Hugh Vere


Bowyer, Captain G. E. W.
Forestier-Walker, Sir L.
Lumley, L. R.


Brass, Captain W.
Forrest, W.
Macdonald, Capt. P. D. (I. of W.)


Brassey, Sir Leonard
Foster, Sir Harry S.
Macdonald, R. (Glasgow, Cathcart)


Briggs, J. Harold
Foxcroft, Captain C. T.
McDonnell, Colonel Hon. Angus


Broun-Lindsay, Major H.
Fraser, Captain Ian
MacIntyre, Ian


Brown, Col. D. C. (N'th'l'd, Hexham)
Fremantle, Lt.-Col. Francis E.
McLean, Major A.


Brown, Brig.-Gen. H. C. (Berks, Newb'y)
Galbraith, J. F. W.
Macmillan, Captain H.


Buchan, John
Ganzoni, Sir John
Macnaghten, Hon. Sir Malcolm


Buckingham, Sir H.
Gates, Percy
McNeill, Rt. Hon. Ronald John


Bull, Rt. Hon. Sir William James
Glyn, Major R. G. C.
Macquisten, F. A.


Burney, Lieut.-Com. Charles D.
Goff, Sir Park
MacRobert, Alexander M.


Burton, Colonel H. W.
Grace, John
Makins, Brigadier-General E.


Butler, Sir Geoffrey
Grattan-Doyle, Sir N.
Malone, Major P. B.


Cadogan, Major Hon. Edward
Greaves-Lord, Sir Walter
Manningham-Buller, Sir Mervyn


Caine, Gordon Hall
Greene, W. P. Crawford
Marriott, Sir J. A. R.


Campbell, E. T.
Grenfell, Edward C. (City of London)
Mason, Lieut.-Col. Glyn K.


Carver, Major W. H.
Grotrian, H. Brent
Meller, R. J.


Cassels, J. D.
Guest, Capt. Rt. Hon. F. E. (Bristol, N.)
Merriman, F. B.


Cautley, Sir Henry S.
Guinness, Rt. Hon. Walter E.
Meyer, Sir Frank


Cayzer, Sir C. (Chester, City)
Gunston, Captain D. W.
Milne, J. S. Wardlaw


Cecil, Rt. Hon. Sir Evelyn (Aston)
Hacking, Captain Douglas H.
Mitchell, S. (Lanark, Lanark)


Chadwick, Sir Robert Burton
Hall, Lieut.-Col. Sir F. (Dulwich)
Mitchell, W. Foot (Saffron Walden)


Chamberlain, Rt. Hn. Sir J. A. (Birm., W.)
Hall, Capt. W. D'A. (Brecon & Rad.)
Mitchell, Sir W. Lane (Streatham)


Chamberlain, Rt. Hon. N. (Ladywood)
Hanbury, C.
Monsell, Eyres, Com. Rt. Hon. B. M.


Charteris, Brigadier-General J.
Hannon, Patrick Joseph Henry
Moore, Lieut.-Colonel T. C. R. (Ayr)


Christie, J. A.
Harrison, G. J. C.
Moreing, Captain A. H.


Churchill, Rt. Hon. Winston Spencer
Hartington, Marquess of
Nall, Colonel Sir Joseph


Churchman, Sir Arthur C.
Harvey, G. (Lambeth, Kennington)
Nelson, Sir Frank


Clarry, Reginald George
Hawke, John Anthony
Newman, Sir R. H. S. D. L. (Exeter)


Cobb, Sir Cyril
Headlam, Lieut.-Colonel C. M.
Newton, Sir D. G. C. (Cambridge)


Cochrane, Commander Hon. A. D.
Heneage, Lieut.-Colonel Arthur P.
Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld.)


Cockerill, Brig.-General Sir George
Henn, Sir Sydney H.
Nuttall, Ellis


Cooper, A. Duff
Herbert, Dennis (Hertford, Watford)
Oakley, T.


Cope, Major William
Hills, Major John Waller
O'Connor, T. J. (Bedford, Luton)


Couper, J. B.
Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.
O'Neill, Major Rt. Hon. Hugh


Courtauld, Major J. S.
Hogg, Rt. Hon. Sir D. (St. Marylebone)
Ormsby-Gore, Rt. Hon. William


Cowan, Sir Wm. Henry (Islington, N.)
Hohler, Sir Gerald Fitzroy
Penny, Frederick George


Craig, Capt. Rt. Hon. C. C. (Antrim)
Holt, Capt. H. P.
Percy, Lord Eustace (Hastings)


Craig, Sir Ernest (Chester, Crewe)
Hope, Sir Harry (Forfar)
Perkins, Colonel E. K.


Croft, Brigadier-General Sir H.
Hopkins, J. W. W.
Perring, Sir William George


Crooke, J. Smedley (Deritend)
Hopkinson, Sir A. (Eng. Universities)
Peto, Sir Basil E. (Devon, Barnstaple)


Crookshank, Col. C. de W. (Berwick)
Hopkinson, A. (Lancaster, Mossley)
Peto, G. (Somerset, Frome)


Crookshank, Cpt. H. (Lindsey, Gainsbro)
Hudson, Capt. A. U. M. (Hackney, N.)
Pilcher, G.


Cunliffe, Sir Herbert
Huntingfield, Lord
Pilditch, Sir Philip


Curzon, Captain Viscount
Hurd, Percy A.
Pownall, Sir Assheton




Price, Major C. W. M.
Spender-Clay, Colonel H.
White, Lieut. -Col. Sir G. Dairymple


Raine, Sir Walter
Sprot, Sir Alexander
Williams, A. M. (Cornwall, Northern)


Rawson, Sir Cooper
Stanley, Lieut.-Colonel Rt. Hon. G. F.
Williams, Com. C. (Devon, Torquay)


Remer, J. R.
Stanley, Hon. O. F. G. (Westm'eland)
Williams, Herbert G. (Reading)


Remnant, Sir James
Steel, Major Samuel Strang
Wilson, R. R. (Stafford, Lichfield)


Rentoul, G. S.
Streatfeild, Captain S. R.
Winby, Colonel L. P.


Rhys, Hon. C. A. U.
Stuart, Hon. J. (Moray and Nairn)
Windsor-Clive, Lieut.-Colonel George


Rice, Sir Frederick
Styles, Captain H. Walter
Winterton, Rt. Hon. Earl


Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Sueter, Rear-Admiral Murray Fraser
Wise, Sir Fredric


Roberts, Sir Samuel (Hereford)
Tasker, R. Inigo.
Withers, John James


Robinson, Sir T. (Lancs., Stretford)
Templeton, W. P.
Wolmer, Viscount


Ropner, Major L.
Thompson, Luke (Sunderland)
Womersley, W. J.


Russell, Alexander West (Tynemouth)
Thomson, F. C. (Aberdeen, S.)
Wood, E. (Chest'r, Stalyb'ge & Hyde)


Rye, F. G.
Thomson, Rt. Hon. Sir W. Mitchell-
Wood, Sir Kingsley (Woolwich W.)


Salmon, Major I.
Titchfield, Major the Marquess of
Wood, Sir S. Hill. (High Peak)


Sandeman, N. Stewart
Tryon, Rt. Hon. George Clement
Worthington-Evans, Rt. Hon. Sir L.


Sanders, Sir Robert A.
Turton, Sir Edmund Russborough
Wragg, Herbert


Sassoon, Sir Philip Albert Gustave D.
Vaughan-Morgan, Col. K. P.
Yerburgh, Major Robert D. T.


Savery, S. S.
Wallace, Captain D. E.
Young, Rt. Hon. Sir Hilton (Norwich)


Scott, Rt. Hon. Sir Leslie
Ward, Lt.-Col. A. L. (Kingston-on-Hull)



Simms, Dr. John M. (Co. Down)
Warrender, Sir Victor
TELLERS FOR THE NOES.—


Skelton, A. N.
Waterhouse, Captain Charles
Colonel Gibbs and Captain


Smith-Carington, Neville W.
Watson, Rt. Hon. W. (Carlisle)
Margesson.


Somerville, A. A. (Windsor)
Wells, S. R.

NEW CLAUSE.—(Amendment of 10 Edw. VII, c. 8.)

Notwithstanding anything contained in this or any other Act to the contrary, the Finance (1909–10) Act, 1910, Schedule (1) (c) (Provisions applicable to retailers' off-licences, Spirits (2) Minimum quantity of spirits to be sold), shall be deemed to have effect as if, in lieu of the words "one reputed quart bottle," there were inserted the words "one reputed pint bottle," and accordingly the minimum quantity which may be sold by a person holding the off-licence to be held by a retailer of spirits shall be, in England and Wales, one reputed pint bottle.—[Sir F. Meyer.]

Brought up, and read the First time.

Sir FRANK MEYER: I beg to move, "That the Clause be read a Second time."
The House will recollect that during the Committee stage this new Clause was moved and that I endeavoured to withdraw it on the assurance of the Financial Secretary to the Treasury that in the meantime the subject of the Clause would be reconsidered by the Chancellor of the Exchequer, and possibly that a different view might be taken. I was not permitted to withdraw the Clause, and I should like, very briefly, to deal with the arguments which were advanced against it on that occasion. I do not want to go over the whole ground which I then stated in its favour, because I believe the House is fully aware of this. I think that the short Debate we had then at least had certain advantages. We now know definitely, as far as the Government are concerned, that two of the arguments advanced on previous occasions against this Clause have been dropped. The right hon. Gentleman did not in
any way advance the argument that this might affect the revenue, nor was the temperance argument advanced from the Government side. Therefore, I maintain that from now onwards those two arguments have been dropped as far as the Government are concerned.
Dealing briefly with the arguments of the right hon. Gentleman, in the first place, the main argument used was that this change would create a great deal of trouble, and in the course of his speech he said:
All Governments for a long time past have rejected this proposal on the principle that what we want is a quiet life. …. We want to avoid difficulties if we can."—[OFFICIAL REPORT, 7th July, 1927; col. 1562, Vol. 208.]
It seems to me a very extraordinary argument to put forward, in opposing any proposal in this House, to say that the Government want a quiet life. I must say if it has been one of the main objects of the present Government to live a quiet life and to avoid trouble, they have been singularly unsuccessful. That may not have been their fault, but if it has been one of their main objects of policy, I cannot, on that score, congratulate them. Then the right hon. Gentleman went on to say that there was no public demand for this change. It is a very difficult thing to prove, and his argument that there was no public demand has been reinforced by a circular sent round on behalf of the licensed victuallers, who also said there was no public demand. That argument comes very strangely from them for this reason. Not very long ago the licensed victuallers had reason to give evidence before a Committee of
which I was a member—the Shops Act Committee—on the question whether they should be entitled to sell cigarettes and tobacco after eight o'clock. It was put to them by certain members who cross-examined them that there was no public demand for this change for which they were asking. They said, "Oh, yes, there is a public demand. We know it, for it comes through us. If the public want this, they do not write to the Government but they come to us and ask us for it, and that is where the public demand comes from." Yet, it is these same gentlemen who said that there was a public demand at that time, who deny that their confreres, the off-licence holders, are as good witnesses as they were and say there is no public demand through them for this change.
I say now, as on the last occasion, that it is very difficult to prove a public demand of this kind. You cannot get bodies of associations formed for the purpose of permitting the purchase of half-bottles, but it is quite evident that the off-licence holders would never have asked for this change unless there was a public demand. It is surely much more to the interest of the off-licence holder to sell a whole bottle and to say to a prospective purchaser, "I can only sell a whole bottle," unless there is such a demand for half-bottles that in refusing it he would lose customers and turn away trade. The very fact that it is during the last few years, since the increase in the price of spirits, that this demand has sprung up, which never existed before the War, is a convincing argument that there is a public demand. Quite apart from that, many indications in the form of letters I have received and personal interviews I have had, convince me that such a demand exists.
In the course of his speech the Financial Secretary to the Treasury made what is, undoubtedly, the strongest point which can be made against this change, and that is the very sharp difference in the scale of duties imposed on the on-licence holder and the off-licence holder. In doing so he rather over-stated the case, for he said:
The reason this particular restriction is placed upon the off-licence holder is that the off-licence holder pays a very much higher duty "—
—he should have said the on-licence holder—
for his licence to sell at all.
Then the right hon. Gentleman said,
The advocates of this change, the champions of the off-licence holders, and the champions of the half-bottle, have never suggested that if this little remaining difference of privilege were swept away the off-licence holder should pay the same licence as his rival does."—[OFFICIAL REPORT, 7th July, 1927; cols. 1564–5, Vol. 208.]
That is begging the question, because everybody knows that the real reason for the distinction and differentiation in the licences is because one has the right to sell quantities, however small, from open vessels on the premises and the other may only sell inclosed vessels and bottles for consumption off the premises. That is the reason for the differentiation and the restriction as to the minimum quantity which may be sold by the off-licence holder is only a very minor point. It is because it is a minor point and an unwarrantable restriction on the public, and because it will do no harm to the public if the change be made, that I am moving this Clause.
There was one advantage which accrued to the supporters of the Clause which came from the Debate we had the other day. When this subject was raised in 1924, the Labour party voted against it. Therefore, it could be said that even if there were a very large body in favour of it on the Conservative side, it was a party question and not supported by the Opposition. Inasmuch as it was the Opposition who refused to allow me to withdraw my Amendment the other day, and 80 of them—the majority of those in the House at the moment—voted in favour of it, we can now say that far the more substantial portion, and indeed the majority of the parties, are in favour of this change. I do genuinely believe that to be the sentiment of the House if it were given a free vote.
The Chancellor of the Exchequer and his representatives have stated that there is no necessity to stir up a hornet's nest on this matter. The Chancellor is a man of great courage, as we all admit, and it seems to me to come strangely from him that on this small matter he should be afraid to stir up a little opposition among the very praiseworthy class of on-
licence holders, when he has had the courage to stir up a great deal more trouble among such even more important classes as the racing and sporting communities and those large sections of the business world who have been very troubled by his action in regard to Clauses 29 and 31, or as they now are, Clauses 31 and 33 of the Finance Bill. I am surprised that the Chancellor of the Exchequer should burke this fence when he has taken so many fences far stiffer and more difficult. I hope that when he comes to reply he will indicate some better reasons than those which in the past have been vouchsafed to the House for refusing to accept this minor but none the less important new Clause, which affects the comfort and wishes of a large section of the community.

Sir J. NALL: I beg to second the Motion.
My name does not appear on the Paper in connection with this new Clause, but I second the Motion, because I think it ought to be seconded, and I hope that the Chancellor of the Exchequer will be able to go some way to meet, it. It is said that one class of traders is in favour of it and that another class of traders is opposed to it. From my own experience I do not feel that either class of trader concerned is particularly anxious about it from its particular point of view, but I do feel that there is a wider public point of view which is apt to be lost sight of when we talk about the controversy in the branches of the trade concerned; and it is solely on that ground that I think the proposal merits the consideration of the House. Why is it that the ordinary householder who desires to keep on hand, it may be brandy or whisky, in small quantities for quite occasional use, should be compelled to buy a full bottle and be debarred from buying a half bottle unless he buys two. When it is urged that the granting of this concession might detract from the business of the ordinary on-licence holder, I ask the House to consider, does the selling of one bottle of beer by this off-licence holder prejudice the business of the on-licence holder? Can it be shown that the on-licence holder's trade, over the country as a whole, has suffered in the past or in recent years because the consumer of beer can go and buy one pint bottle from an off-licence holder?
The thing is ridiculous. Does the possibility of buying a half bottle of port or of any kind of wine from an off-licence holder prejudice the sale of the same thing in the on-licence premises? Of course it does not. People do not go into the on-licence holder's house merely because they can get these smaller quantities. I do not for one moment believe that the granting of this concession in regard to spirits would have the slightest ultimate result on the ordinary business of on-licence premises. Certain it is that I have never heard any form of opinion expressed, even from that quarter, against this proposal, which has been brought up time after time, at election times and annually on the Finance Bill. Therefore, I think the time has arrived when we should consider this question on its merits, when the convenience of the greater public which is the general public at large, should be considered, and when we should realise that it is utterly unreasonable that the ordinary householder who desires to keep an emergency supply of brandy or whisky should be compelled to buy twice the quantity which he need keep for such a purpose. I hope that the Chancellor of the Exchequer will be able to meet us in this proposal, if not in the form proposed, at least in a way which will give the general public some relaxation of the present irksome and unnecessary restriction.

Mr. CHURCHILL: I regret that I was not present on the Committee stage when this matter was discussed, but I understand that my hon. Friend who moved this new Clause and my hon. Friend who seconded it, have renewed, with suitable variations, the cogent arguments which they then employed. I am afraid it will not be possible for me to produce any novelty of argument in justifying the position which the Government feel bound to take up upon this question. The arguments which my hon. Friend the Member for the Hulme Division (Sir J. Nall) has used about the householder, who for medicinal or other purposes wishes to keep a small quantity of brandy in his home and is forced to buy a whole bottle, whereas he might conveniently buy only half of this quantity, would equally justify a demand for a quarter bottle. Why
should the householder be compelled to have a full half bottle of this commodity in his house when a quarter bottle would probably serve the purposes of a serious emergency of a nature to threaten health? If it comes to that, I say that all the more would you affect the position of the on-licence holder. After all, the on-licence holder may be a very unpopular figure and is the subject of denunciation in many quarters, but he is subject to the strictest legislation and regulation in every way. He pays a very heavy licence duty, and that duty has remained constant, although the hours of sale have been greatly reduced and the consumption of alcoholic liquors is steadily declining, and although restrictions and Regulations of every kind have been attached to the licence.
Whatever may be the faults of the on-licence holder, he at any rate plays his part in a system which now is interdependent and inter-related, and I think it would be extremely unfair and unjust if we were to pick out one particular item which happens to command a certain amount of support and to alter our system of licensing the sale of alcoholic liquors in such a way as to favour one particular section to the corresponding detriment of the other kind of licence holders. What is the use of saying that the on-licence holder will not suffer by this change? He believes most strongly that he will suffer. I have been at pains to inquire as to the view which is taken in these quarters, and I certainly understand that they would regard it as extremely detrimental to their interests. I am not prepared to open up the question of the licence duties piecemeal. I am sure it would be extremely detrimental to our discussions if we were to attempt to do so. The day may come when the licence duties can be overhauled and examined. There is no doubt that in some respects they are extremely heavy, having regard to the changes which have taken place in the habits of the people and in the hours of sale and other restrictions which are now enforced.
If it were possible at any time to examine the question of the licence duties from the point of view of making some mitigation, then would be the moment when the corresponding advantage to the
off-licence holder might be given—the privilege of selling a half bottle. The two matters might well stand together and be treated together. At any rate they can only be treated together and be dealt with in conjunction with a general review of the burden of these licence duties. In the meantime, I am not in a position to do either. I am not able this year to reduce the duties of the on-licence holder, nor am I able to agree to a change which I am sure would be felt to be an aggravation of the burdens that the on-licence holder bears. We have not the funds at our disposal to make the remission, and, in the absence of ability to do that, I say that it would he altogether inequitable to make the change now proposed. I very much regret that I am not able to go further to meet my hon. Friends. I am only adhering to the position which Government after Government in the last four or five years has consistently maintained to those who advocated this concession. Some have done it for one reason and some for another, but the main reason on which we base ourselves to-night, and the reason which has been the underlying structure of the arguments of all Governments since the War, is that you should not in a partial or piecemeal way affect the general equilibrium of the licence duties.

Sir WILLIAM DAVISON: The Chancellor of the Exchequer says that this concession has been refused many times before and that he does not wish to go into the matter piecemeal. Surely the reason why this concession is demanded now is that the price of a bottle of whisky used to be 4s. 6d. or 5s. and now it is vastly more. This change is desirable in the interests of the general public. Suppose that a woman is suddenly faced, as practically every household in the country is faced from time to time, with the necessity of having some stimulant in the home. Suppose that she has not the 12s. 6d. or 15s. to buy a full bottle of spirits, and that in a sudden emergency she wants to buy a smaller quantity. That is the reason why this new Clause is desirable. The Chancellor of the Exchequer says, why should we not ask for the concession to go further and to apply to a quarter bottle of brandy? Quarter bottles might be used for the very reason that the Chancellor of the Exchequer thinks they may be used, for
the purpose of people who want to drink. It is absurd to suggest that these half bottles would be used by people who want to buy whisky or brandy for intemperance or drinking. I appeal to the Chancellor of the Exchequer even now to grant something which is desired by the public in the general interest.

Lieut.-Commander BURNEY: As the Chancellor of the Exchequer says that there is no diminution of revenue involved, and as it seems that many Members support this contention when they are in opposition but not when they are supporting the Government of the day, would the Chancellor of the Exchequer allow this Motion to go to a free vote of the House, so that each Member can deal with the trade interests of his constituency in such manner as he likes. The public are the ones who are interested and I think that if the question were left to the free vote of the House the Chancellor of the Exchequer would be relieved of the responsibility which he is at present assuming not only for himself but for all of his supporters.

Mr. CHURCHILL: I can speak again only by the indulgence of the House. Such a proposal in many ways seems attractive as meeting the individual point of view of Members who represent constituencies where this or that opinion may be predominant on the subject. As my hon. Friend justly says, the Exchequer would be no serious loser as the result of such a vote, but I must remind the House that we consider it would be inequitable in the present state of the licence duties to touch one part without reconsidering the whole. I should like to be in a position to reconsider the whole matter and make some mitigation. If I were in such a position then I think the time for this concession would have arrived. It has not arrived now and, in the interval, having said that we should consider this proposal to be inequitable, it is ob

viously not possible for the Government to take a course which, on every other ground, I should be delighted to commend to the House.

Major COURTAULD: I wish to add a few words in support of the Clause. I have listened with careful attention to the arguments which the Chancellor of the Exchequer has placed before the House and I cannot see that they have any real weight. I am not going to pretend that this subject is of vital importance to the nation but I think the small portion of the community who are affected deserve our consideration. I hope my hon. Friend the Mover of the Motion will press this matter in order that those who consider that this point, although a small one, involves questions of freedom, of liberty and of common sense may have a chance of expressing those opinions in the Division Lobby.

Mr. CRAWFURD: The right hon. Gentleman in his reply has dealt with the proposed new Clause on lines which the quite foreign to the motives in the minds of some Members of the House. It would be very unfortunate if a question of this sort were to degenerate into a battle between two separate interests fought out on the Floor of the House with the Chancellor taking one side against the other. The right hon. Gentleman has thrown out hints that the Government may at some future date deal with the whole question of licence duties and he has suggested that this question might be considered then among other matters. Perhaps one of his colleagues in the Government will take an opportunity of telling us before we divide, whether the Government actually do contemplate any such consideration and readjustment of these matters during the lifetime of the present Parliament.

Question put, "That the Clause be read a Second time."

The House divided: Ayes, 81; Noes, 223.

Division No. 268.]
AYES.
[7.33 p.m.


Adamson, W. M. (Staff., Cannock)
Bondfield, Margaret
Cave, W. G.


Alexander, A. V. (Sheffield, Hillsbro')
Bowerman, Rt. Hon. Charles W.
Crawford, H. E.


Alexander, E. E. (Leyton)
Broad, F. A.
Davies, Evan (Ebbw Vale)


Attlee, Clement Richard
Bromley, J.
Davison, Sir W. H. (Kensington, S.)


Baker, J. (Wolverhampton, Bilston)
Brown, James (Ayr and Bute)
Day, Colonel Harry


Baker, Walter
Cape, Thomas
Dennison, R.


Barker, G. (Monmouth, Abertillery)
Cluse, W. S.
Duncan, C.


Barnes, A.
Clynes, Rt. Hon. John R.
Dunnico, H.


Beckett, John (Gateshead)
Connolly, M.
Edwards, C. (Monmouth, Bedwellty)


Foxcroft, Captain C. T.
Mackinder, W.
Sinclair, Major Sir A. (Caithness)


Gardner, J. P.
Maclean, Neil (Glasgow, Govan)
Sitch, Charles H.


Greenail, T.
Mitchell, Sir W. Lane (Streatham)
Smillie, Robert


Greenwood, A. (Nelson and Colne)
Montague, Frederick
Smith, Ben (Bermondsey, Rotherhithe)


Grotrian, H. Brent
Morrison, R. C. (Tottenham, N.)
Stamford, T. W.


Grundy, T. W.
Mosley, Oswald
Stewart, J. (St. Rollox)


Hall, G. H. (Merthyr Tydvil)
Murnin, H.
Sullivan, J.


Harris, Percy A.
Nall, Colonel Sir Joseph
Sutton, J. E.


Hartshorn, Rt. Hon. Vernon
Naylor, T. E.
Thorne, W. (West Ham, Plaistow)


Henderson, T. (Glasgow)
Oliver, George Harold
Thurtle, Ernest


Hirst, G. H.
Parkinson, John Allen (Wigan)
Trevelyan, Rt. Hon. C. P.


Hirst, W. (Bradford, South)
Pethick-Lawrence, F. W.
Wallhead, Richard C.


Hore-Beilsha, Leslie
Ponsonby, Arthur
Whiteley, W.


Hutchison, Sir Robert (Montrose)
Potts, John S.
Wilkinson, Ellen C.


John, William (Rhondda, West)
Purcell, A. A.
Williams, Dr. J. H. (Lianelly)


Kennedy, T.
Richardson, R. (Houghton-le-Spring)
Womersley, W. J.


Knox, Sir Alfred
Ritson, J.



Lowth, T.
Shaw, Rt. Hon. Thomas (Preston)
TELLERS FOR THE AYES.—


Lunn, William
Shepherd, Arthur Lewis
Sir F. Meyer and Major Courtauld.


NOES.


Acland-Troyte, Lieut.-Colonel
Elliot, Major Walter E.
Looker, Herbert William


Adamson, Rt. Hon. W. (Fife, West)
Ellis, R. G.
Lougher, Lewis


Albery, Irving James
Evans, Captain A. (Cardiff, South)
Lumley, L. R.


Alexander, Sir Wm. (Glasgow, Cent'l)
Evans, Capt. Ernest (Welsh Univer.)
McDonnell, Colonel Hon. Angus


Allen, Lieut. -Col, Sir William James
Fairfax, Captain J. G.
MacIntyre, Ian


Ammon, Charles George
Falle, Sir Bertram G.
McLean, Major A.


Ashley, Lt.-Col. Rt. Hon. Wilfrid W.
Fermoy, Lord
Macmillan, Captain H.


Atholl, Duchess of
Fielden, E. B.
McNeill, Rt. Hon. Ronald John


Balniel, Lord
Forestier-Walker, Sir L.
Macquisten, F. A.


Banks, Reginald Mitchell
Foster, Sir Harry S.
MacRobert, Alexander M.


Barclay-Harvey, C. M.
Fraser, Captain Ian
Makins, Brigadier-General E.


Beamish, Rear-Admiral T. P. H.
Fremantle, Lieut.-Colonel Francis E.
Malone, Major P. B.


Bennett, A. J.
Galbraith, J. F. W.
Manningham-Buller, Sir Mervyn


Betterton, Henry B.
Gates, Percy
Margesson, Captain D.


Bird, E. R. (Yorks, W. R., Skipton)
Gibbs, Col. Rt. Hon. George Abraham
Marriott, Sir J. A. R.


Boothby, R. J. G.
Gillett, George M.
Mason, Lieut.-Col. Glyn K.


Brass, Captain W.
Goff, Sir Park
Merriman, F. B.


Brassey, Sir Leonard
Grace, John
Mitchell, S. (Lanark, Lanark)


Briant, Frank
Graham, Fergus (Cumberland, N.)
Mitchell, W. Foot (Saffron Walden)


Briggs, J. Harold
Graham, Rt. Hon. Wm. (Edin., Cent.)
Monsell, Eyres, Com. Rt. Hon. B. M.


Broun-Lindsay, Major H.
Greaves-Lord, Sir Walter
Moreing, Captain A. H.


Brown, Col. D. C. (N'th'l'd., Hexham)
Greene, W. P. Crawford
Neville, Sir Reginald J.


Brown, Ernest (Leith)
Grenfell, D. R. (Glamorgan)
Newman, Sir R. H. S. D. L. (Exeter)


Buchan, John
Grenfell, Edward C. (City of London)
Newton, Sir D. G. C. (Cambridge)


Buckingham, Sir H.
Groves, T.
Nicholson, Col. Rt. Hn. W.G. (Ptrsf'ld.)


Butler, Sir Geoffrey
Guest, Capt. Rt. Hon. F. E. (Bristol, N.)
Nuttall, Ellis


Cadogan, Major Hon. Edward
Guinness, Rt. Hon. Walter E.
Oakley, T.


Campbell, E. T.
Hacking, Captain Douglas H.
O'Connor. T. J. (Bedford, Luton)


Carver, Major W. H.
Hall, F. (York, W. R., Normanton)
O'Neill, Major Rt. Hon. Hugh


Cassels, J. D.
Hall, Capt. W. D'A. (Brecon & Rad.)
Ormsby-Gore, Rt. Hon. William


Cautley, Sir Henry S.
Hanbury, C.
Penny, Frederick George


Cayzer, Sir C. (Chester, City)
Hannon, Patrick Joseph Henry
Percy, Lord Eustace (Hastings)


Cecil, Rt. Hon. Sir Evelyn (Aston)
Harland, A.
Perring, Sir William George


Chadwick, Sir Robert Burton
Harrison, G. J. C.
Peto, Sir Basil E. (Devon, Barnstaple)


Charteris, Brigadier-General J.
Hartington, Marquess of
Peto, G. (Somerset, Frome)


Churchill, Rt. Hon. Winston Spencer
Harvey, G. (Lambeth, Kennington)
Pilcher, G.


Churchman, Sir Arthur C.
Hawke, John Anthony
Pilditch, Sir Philip


Clarry, Reginald George
Headlam, Lieut.-Colonel C. M.
Pownall, Sir Assheton


Cochrane, Commander Hon. A. D.
Henn, Sir Sydney H.
Price, Major C. W. M.


Cockerill, Brig.-General Sir George
Herbert, Dennis (Hertford, Watford)
Radford, E. A.


Compton, Joseph
Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.
Raine, Sir Walter


Cooper, A. Duff
Hogg, Rt. Hon. Sir D. (St. Marylebone)
Reid, D. D. (County Down)


Cope, Major William
Hohler, Sir Gerald Fitzroy
Remer, J. R.


Couper, J. B.
Holbrook, Sir Arthur Richard
Remnant, Sir James


Courthope, Colonel Sir G. L.
Hope, Sir Harry (Forfar)
Richardson, Sir P. W. (Sur'y, Ch'ts'y)


Cowan, D. M. (Scottish Universities)
Hudson, Capt. A. U. M. (Hackney, N.)
Ropner, Major L.


Craig, Capt. Rt. Hon. C. C. (Antrim)
Hunter-Weston, Lt. -Gen. Sir Aylmer
Russell, Alexander West (Tynemouth)


Croft, Brigadier-General Sir H.
Huntingfield, Lord
Rye, F. G.


Crooke, J. Smedley (Deritend)
Hurd, Percy A.
Salmon, Major I.


Crookshank, Col. C. de W. (Berwick)
Hurst, Gerald B.
Salter, Dr. Alfred


Crookshank, Cpt. H. (Lindsey, Gainsbro)
Inskip, Sir Thomas Walker H.
Samuel, A. M. (Surrey, Farnham)


Cunliffe, Sir Herbert
Jackson, Sir H. (Wandsworth, Cen'l)
Sandeman, N. Stewart


Curzon, Captain Viscount
Jones, Henry Haydn (Merioneth)
Sanders, Sir Robert A.


Dalkeith, Earl of
Kennedy, A. R. (Preston)
Scott, Rt. Hon. Sir Leslie


Dalton, Hugh
King, Commodore Henry Douglas
Simms, Dr. John M. (Co. Down)


Davies, Ellis (Denbigh, Denbigh)
Lansbury, George
Skelton, A. N.


Davies, Maj. Geo. F. (Somerset, Yeovil)
Lawrence, Susan
Slesser, Sir Henry H.


Davies, Dr. Vernon
Lee, F.
Smith, H. B. Lees (Keighley)


Dawson, Sir Philip
Leigh, Sir John (Clapham)
Snowden, Rt. Hon. Philip


Dixey, A. C.
Lister, Cunliffe, Rt. Hon. Sir Philip
Spender-Clay, Colonel H.


Drewe, C.
Loder, J. de V.
Spoor, Rt. Hon. Benjamin Charles


Edmondson, Major A. J.
Long, Major Eric
Sprot, Sir Alexander




Stanley, Lieut.-Colonel Rt. Hon. G. F.
Varley, Frank B.
Winby, Colonel L. P.


Stanley, Hon. O. F. G. (Westm'eland)
Viant, S. P.
Winterton, Rt. Hon. Earl


Steel, Major Samuel Strang
Ward, Lt.-Col. A. L. (Kingston-on-Hull)
Wise, Sir Fredric


Storry-Deans, R.
Warrender, Sir Victor
Withers, John James


Strauss, E. A.
Waterhouse, Captain Charles
Wolmer, Viscount


Streatfeild, Captain S. R.
Watson, Rt. Hon. W. (Carlisle)
Wood, E. (Chest'r, Stalyb'ge & Hyde)


Sueter, Rear-Admiral Murray Fraser
Wells, S. R.
Wood, Sir Kingsley (Woolwich W.)


Tasker, R. Inigo.
Westwood, J.
Wood, Sir S. Hill- (High Peak)


Templeton, W. P.
Wiggins, William Martin
Worthington-Evans, Rt. Hon. Sir L.


Thom, Lt.-Col. J. G. (Dumbarton)
Williams, A. M. (Cornwall, Northern)
Yerburgh, Major Robert D. T.


Thompson, Luke (Sunderland)
Williams, Com. C. (Devon, Torquay)



Thomson, Rt. Hon. Sir W. Mitchell-
Williams, Herbert G. (Reading)
TELLERS FOR THE NOES.—


Tryon, Rt. Hon. George Clement
Wilson, C. H. (Sheffield, Attercliffe)
Mr. F. C. Thomson and Captain


Turton, Sir Edmund Russborough
Wilson, R. R. (Stafford, Lichfield)
Bowyer.

NEW CLAUSE.—(income Tax not taxed at source.)

Where a recognised law agent, acting for a trust, satisfies the Income Tax Commissioners that—

(a) under the trust the sole beneficiary is, or all the beneficiaries are, not liable to Income Tax by reason of the total income being below the statutory free allowance, the dividends for all capital not taxed at source shall be issued free of Income Tax;
(b) in the case of a trust in which some, but not all, of the beneficiaries are exempt by reason of the total income being below the statutory free allowance and in which a portion of the income not taxed at source can be specifically allotted for the benefit of such exempt beneficiaries, dividends for such capital shall be issued free of Income Tax.—[Brigadier-General Charteris.]

Brought up, and read the First time.

Brigadier-General CHARTERIS: I beg to move, "That the Clause be read a Second time."
This point has been brought to my notice by law agents in various parts of the country. It seems that in the case of a trust where some of the beneficiaries are below the Income Tax limit, although some of the funds or profits of the trust are derived in monies issued free of Income Tax at source, yet the law agent handling that money is called on by the Income Tax authorities of his neighbourhood, first to pay the tax, and then to claim relief. Not only does this practice prevent beneficiaries from receiving the money at once, but it also causes the law agent to made additional charges on the beneficiaries according to scale for the services which he has to render. The proposed new Clause is in two parts so as to cover the contingency of a trust having several beneficiaries, some of whom are not exempt from Income Tax. In that case, if it is possible for a portion of the trust fund to be earmarked for the benefit of the beneficiary who is not liable
to Income Tax, then the Clause allows the benefit to be given direct. The Clause has particular reference to money on deposit receipt. I am informed by the law agents who have brought this matter to my notice that there are in almost all trusts, especially small trusts, some such sums which are on deposit receipt for convenience and on which Income Tax has to be paid first and recovered afterwards. I understand that this custom is not general, and that in certain parts of the country the Income Tax authorities do not require that tax should be paid and afterwards recovered. If that be so, and if, by any means inside the mechanism of the Inland Revenue, the custom can be made general in the country of not calling for Income Tax in the first instance from beneficiaries who are below the Income Tax limit, then the purpose of the Clause will have been met.

Mr. COUPER: I beg to second the Motion.
I appeal to the Chancellor to accept this Clause as it is proposed entirely in the interests of that large body of the the community who have limited means and have suffered in recent times from the effects of the severe depression through which the country has been passing. More especialy would I appeal to the right hon. Gentleman on the ground that in the ultimate resort, this proposal makes no difference to the Treasury, as the amount which is first deducted for tax has then to be recovered, at a cost to the recipients by the payment of bigger fees to the law agents acting on their behalf. Under these circumstances, I hope the Chancellor of the Exchequer will be able to accept the Clause.

Mr. CHURCHILL: My hon. and gallant Friend the Member for Dumfries (Brigadier-General Charteris) has drafted this Clause in what he considers the best form to achieve his object. It
is not perhaps very clear in its text, but it is, I gather, intended to secure that, in the case of an exempt beneficiary under a trust, any income derived from investments not taxed at sourer shall be paid to the beneficiary in full and shall not be taxed in the hands of the trustee. My hon. and gallant Friend was good enough to discuss this matter with the expert authorities of the Inland Revenue, and I think they were able to satisfy him that, to a very considerable extent, the matter is already provided for under the existing administration of the law, and that on every possible occasion steps are taken to avoid the necessity of collecting tax from the trustees and subsequently refunding it to the exempted beneficiaries. That, at any rate, is our practice. My hon. and gallant Friend, I understand, thought that nevertheless it would be advantageous if he brought this matter before the House in the form of a new Clause, in order that some attention should be drawn to it. As I have said, under the existing law and practice the exempted beneficiary is, wherever possible, already treated in the way that my hon. and gallant Friend and the hon. Member for Maryhill (Mr. Couper), who seconded the Clause, desire. There are, however, more complicated cases, cases where the trust income consists partly of income taxed at source and partly of income not taxed at source, and where some beneficiaries are only entitled to the residue, or share of the residue, of the income, and in these cases it would be quite impracticable to carry out the proposed procedure. For these reasons, while I have taken this opportunity of affirming what is our practice, namely, to take every step to avoid the necessity of collecting tax from the trustee which would be subsequently refunded to the exempt beneficiary, and while that will continue to be our practice, I could not accept a proposal which would bind us in such a rigid form as that which is suggested.

Brigadier-General CHARTERIS: After the statement of my right hon. Friend, I beg leave to withdraw the Clause.

Motion and Clause, by leave, withdrawn.

Mr. SPEAKER: The new Clause—(Amendment of Rule 13, Schedule E)—standing in the name of the hon. Member for Dudley (Mr. Lloyd) would involve a charge as it stands. Perhaps he will refer to a Government Amendment which, I think, will meet the point in a way which does not involve an additional charge. That disposes of the new Clauses.

CLAUSE 3.—(Exemption of motor tyres from customs duty to cease.)

Mr. MACQUISTEN: I beg to move, in page 2, line 19, at the end to insert the words:
Provided that notwithstanding any repeal effected by this Act the exemption given by section three of the Finance Act, 1925, shall continue to have effect in relation to motor tyres which are shown to the satisfaction of the Commissioners to have been shipped on board the importing ship for import direct on or before the twelfth day of April, nineteen hundred and twenty-seven.
There was a time when, before the Finance Act became law, there was a period which elapsed, and it was possible for those who were to be taxed under the Finance Act to rush in very large quantities of goods. I remember that when first the McKenna Duties were imposed on motors, even the most Free Trade Member of the House was very much perturbed at seeing the barges coming up the Thames laden with hundreds and hundreds of imported foreign cars for which there was no warehouse accommodation, and which had to be stacked in the fields to avoid the duty. That was a hole in our legislation, and it was amended, and no particular dealer suffered heavy loss, but, as the matter now stands, I think the pendulum has swung rather to the opposite extreme. I congratulate the Chancellor of the Exchequer and his advisers on the immense secrecy which surrounded the present Budget. I do not think anybody had the slightest notion of what the new taxes were to be, and consequently I do not think there was anything in the nature of forestalling at all, with the result that the axe fell at the particular hour on innocent parties. To make it fall in that way is swinging to the opposite extreme of the old rule, and it involves cases of undesirable hardship. I am
moving this Amendment to meet particular cases, and I have a precedent in my favour, because I find that when the duties on German imports into this country were imposed, on 16th March, 1921, the then Chancellor of the Exchequer, the right hon. Member for West Birmingham (Sir Austen Chamberlain) moved a Clause to cover the same hardship as here involved. On that date, after a discussion which was raised on an Amendment by Lord Banbury, then Sir Frederick Banbury, on facts supplied to him, the Chancellor moved a new Clause in the following words:
Provided that this Act shall not apply to goods imported before the 15th day of April, 1921, if it is proved to the satisfaction of the Commissioners that the goods wore imported in pursuance of a contract entered into before the 8th day of March, 1921.''—[OFFCIAL REPORT, 16th March, 1921; col. 1563, Vol. 139.]
That was because this German Reparation Bill came down upon importers who had in some cases paid for the goods, and it was felt to be a terrible hardship that this sudden duty should be imposed upon them and that they should be so very much out of pocket.
The position to-day in regard to these motor tyres is exactly the same. There were certain people who imported tyres regularly. There were not enough tyre works in this country to supply the market. Fortunately, under these beneficent duties, which have now been imposed, factories are springing up, and very soon, owing to the beneficial effects of the duties imposed in this Budget, we shall be able to supply our own market with tyres produced by British workmen, which will be of immense benefit to the whole community and, above all, to the workers, and I expect, with the reduced cost caused by having a certain market—

Mr. SPEAKER: The hon. and learned Member must not discuss the benefits of the duty. I have not selected an Amendment to leave out the Clause, because it has been discussed twice before. He must confine himself to this Amendment.

Mr. MACQUISTEN: I bow to your ruling, Sir, but I was going to say that now that these duties are imposed, to come down suddenly, on a particular date, is going to penalise the individual trader who was bona fide importing, not dump-
ing goods, who was taking his particular weekly consignment of tyres to supply the British market. Suddenly to impose a heavy duty, coming like a bolt from the blue upon him, means that there is no possibility of his passing it on to anybody. He has to bear the whole burden of it himself. It will not do to say that there are others who, fortunately, just got in an hour or two before the duty fell, and that between the two parties importing, one of them getting in a few hours late and the other a few hours early, the Treasury balances, losing on the one and gaining on the other. It is no satisfaction to "A" that "B" has got off, if "A" has to pay out of his own pocket, because he has no recourse whatever upon the person from whom he bought the commodity. If we are going to impose these duties—and I believe in them with all my heart—we should not do it cruelly or harshly.
I know of one particular instance of a man who is doing a great public service in a certain part of the country by opening up a very large area where the transport facilities are of the worst possible description. This man has imported a certain quantity of these commodities, working to some extent on borrowed capital, and suddenly this heavy duty comes on him when he had not the faintest suspicion that there was the slightest chance of his being landed in that way. He acquiesces in it in so far as the time to come is concerned, because for the future, he says, he can make the necessary arrangements, but in this particular instance it is impossible to do so. I have another instance. Only the other night, in connection with the Wine Duty, the Financial Secretary to the Treasury had the fairness to make an allowance; and if we can have it in that instance, I think we ought to have it here. If this duty is enforced absolutely on the stroke of the clock in the way in which it is being done in this Budget, it will inflict a very great hardship on a limited number of people, because it does not affect a large issue. I ask accordingly that the two precedents of the German Reparation Bill, when the then Chancellor of the Exchequer provided for just such cases, and of the instance in this very Budget, in connection with the Wine Duty, should be given effect to.

Lieut.-Commander BURNEY: I beg to second the Amendment.

8.0 p.m.

Mr. CHURCHILL: It is always a regret to me to have to refuse anything to my hon. and learned Friend the Member for Argyll (Mr. Macquisten), because he always makes his cases in such a reasonable and even seductive manner and usually enlivens them by happy flashes of humour. Nevertheless, I am afraid I must, on this occasion, remain an imitator of the deaf adder, and stop my ears to his charming. We all remember what a scandal it was when, during the long delays which formerly intervened between the introduction of a Budget and the passage into law of the Finance Bill, immense quantities of goods were hurried into this country, and the purposes of Parliament were to a very large extent defeated. Incidentally, not only were the purposes of Parliament defeated, but the home trade was dislocated by an altogether abnormal importation, which bore no relation to ordinary trade requirements or to the ebb and flow of demand and supply throughout the world. Then we had general assent to introduce a Regulation which enabled us to make the duties effective from the time when the Budget was introduced or when the Resolutions were first assented to by the Committee of Ways and Means. My hon. and learned Friend asks me to make an inroad upon this principle by practically laying down a rule that goods in transit, which have actually started from the country of origin, shall be franked and shall not be subject to this imposition.

Mr. MACQUISTEN: The goods might be within sight of our shores.

Mr. CHURCHILL: If I entered upon that subject I might be drawn on to say they were approaching the harbour, that they were within the harbour, and so forth. It is much better to stick to the rule which has been made. No rule can be laid down without inflicting some hardship. There are always those cases which are just beyond where the line is drawn, and in regard to which there is a grievance; but, if we were to try to eliminate that form of grievance from the Bill, we would find that the Clauses would be so full of mitigations and reservations that they would be even more unintelligible and chaotic than they are
at the present time. Therefore, I must keep to the rule. I do not refer to the case which the hon. Gentleman has in his mind, but, nevertheless, there is no doubt that there was a general expectation before the Budget was introduced that a duty on tyres might well form a part of our proposals. The secret on the whole, was extremely well kept, but there was a certain atmosphere of expectation, largely, I think, founded upon a reasonable acquaintance with the movements of Parliamentary opinion and of public opinion, that something of this kind would be attempted. At any rate, it reflected itself very markedly in the figures because the importation of motor covers during the period from the 1st to the 11th April was greater than in any of the three previous months of the year, and subsequently, after the 11th April, there was a sharp falling off. For instance, in January 119,000 outer covers were imported, in February 120,000, in March 176,000, while between the 1st and the 11th April, the figure was 193,000. From the 12th to the 30th April, only 36,000 were imported; during May the number was 75,000, and during June, 50,000. So we see this importation growing in volume as the Budget day approaches, reaching its full upward flow in the few days immediately before the duty became effective, and afterwards falling off in a very marked way.
I am satisfied that, however strong may be the case which the hon. and learned Gentleman was putting—that I do not question in any way—there was an attempt to place larger quantities of foreign motor-car tyres in this country before the imposition of the duty than was warranted by the actual trading circumstances, and I see no reason, after what happened in the last Session of Parliament, why we should mitigate the not very serious consequences which have befallen those who have attempted to evade a potential duty. I, therefore, regret that I am unable to meet my hon. and learned Friend and to break the rule which Parliament has laid down. Moreover, in doing so, we should sacrifice some revenue; I cannot say it is very large; it is indefinite in its extent, but it is certainly sufficient to be appreciable.

Mr. W. GRAHAM: I think hon. Members on this side of the House will have followed with the keenest interest the proposal made by my hon. and learned Friend the Member for Argyll (Mr. Macquisten), and more particularly what has been said by the right hon. Gentleman the Chancellor of the Exchequer. We have always been informed that these duties fall upon the foreigner, and that they did not lead to any restriction of trade. Now it appears that there has been a considerable restriction in the volume of trade since this was introduced. But I do not want to dwell on these considerations, because the evidence is plain and clear; I want to try, rather, to see whether or not I can agree with the hon. and learned Member who has made this proposal. There was no doubt that, when we suddenly imposed this 33⅓ per cent. duty, it would fall very heavily and with great hardship upon a certain class of traders whose goods were actually in transit, and who had entered into a bargain on the basis of the price or the arrangement which they agreed upon with the overseas producer. The right hon. Gentleman the Chancellor of the Exchequer frankly admits that there are hard cases which are just over the border-line, hut he said we could not make any inroad upon the principle laid down in this new Clause to which we on this side of the House generally take exception.

I do not think for a moment that you can go into the wide sphere of the contracts or arrangements which have been made, because that might cover a long period, but in such cases as my hon. and learned Friend has in mind, where the goods are practically here, and where it is perfectly plain that the duty alters the whole position, we on this side, quite apart from Free Trade altogether, would agree that you have established a real case of hardship. All that the right hon. Gentleman the Chancellor of the Exchequer says in reply is that we must draw the line somewhere; but I would be inclined to suggest to him that it is by no means beyond the wit of the very capable officials in this country to identify the small, limited class of transactions that the Mover of this proposal has in mind. It is only fair to give these people the benefit of the law as it stood at the time when their arrangements were made, and when they had practically completed their transactions. I think that case is very strong, and I would advise the hon. and learned Member to go to a Division, and we on this side will whole-heartedly promise him our support.

Question put, "That those words be there inserted in the Bill."

The House divided: Ayes, 111; Noes, 229.

Division No. 269.]
AYES.
[8.12 p.m.


Adamson, Rt. Hon. W. (Fife, West)
Davies, Evan(Ebbw Vale)
Kennedy, T.


Adamson, W. M. (Staff., Cannock)
Davies, Rhys John (Westhoughton)
Lansbury, George


Alexander, A. V. (Sheffield. Hillsbro')
Day, Colonel Harry
Lawrence, Susan


Ammon, Charles George
Dennison, R.
Lawson, John James


Attlee, Clement Richard
Duncan, C.
Lee, F.


Baker, J. (Wolverhampton, Bilston)
Dunnico, H.
Lowth, T.


Baker, Walter
Evans, Capt. Ernest (Walsh Univer.)
Lunn, William


Barker, G. (Monmouth. Abertillery)
Gardner, J. P.
Mackinder, W.


Barnes, A.
Gillett, George M.
Maclean, Nell (Glasgow, Govan)


Batey, Joseph
Graham, Rt. Hon. Wm. (Edin., Cent.)
Macquisten, F. A.


Beckett, John (Gateshead)
Greenall, T.
Mosley, Oswald


Bondfield, Margaret
Grenfell, D. R. (Glam[...]n)
Murnin, H.


Bowerman, Rt. Hon. Charles W.
Groves, T.
Naylor, T. E.


Broad, F. A.
Grundy, T. W.
Oliver, George Harold


Bromley, J.
Hall, F. (York, W. R., Norm[...]nton)
Paling, W.


Brown, Ernest (Leith)
Hall, G. H. (Merthr Tydvil)
Pethick-Lawrence, F. W.


Brown, James (Ayr and Bute)
Hamilton, Sir R. (Orkney & Shetland)
Ponsonby, Arthur


Buxton, Rt. Hon. Noel
Harris, Percy A.
Potts, John S.


Cape, Thomas
Hartshorn, Rt. Hon. Vernon
Purcell, A. A.


Charleton, H. C.
Henderson, Right Hon. A. (Burnley)
Rees, Sir Beddoe


Cluse, W. S.
Henderson, T. (Glasgow)
Richardson, R. (Houghton-le-Spring)


Clynes, Rt. Hon. John R.
Hirst, G. H.
Ritson, J.


Compton, Joseph
Hirst, W. (Bradford, South)
Salter, Dr. Alfred


Connolly, M.
Hore-Belisha, Leslie
Scurr, John


Cove, W. G.
John, William (Rhondda, West)
Shaw, Rt. Hon. Thomas (Preston)


Cowan, D. M. (Scottish Universities)
Jones, Henry Haydn (Merioneth)
Shepherd, Arthur Lewis


Crawfurd, H. E.
Jones, Morgan(Caerphilly)
Sinclair, Major Sir A. (Caithness)


Dalton, Hugh
Jones, T. I. Mardy (Pontypridd)
Sitch, Charles H.


Davies, Ellis (Denbigh, Denbigh)
Kelly, W. T.
Slesser, Sir Henry H.


Smillie, Robert
Taylor, R. A.
Whiteley, W.


Smith, Ben(Bermondsey, Rotherhithe)
Thorne, W. (West Ham, Plaistow)
Wiggins, William Martin


Smith, H. B. Lees (Keighley)
Townend, A. E.
Wilkinson, Ellen C.


Snell, Harry
Trevelyan, Rt. Hon. C. P.
Williams, Dr. J. H. (Llanelly)


Snowden, Rt. Hon. Philip
Varley, Frank B.
Williams, T. (York, Don Valley)


Stamford, T. W.
Viant, S. P.
Wilson, C. H. (Sheffield, Attercliffe)


Stewart, J. (St. Rollox)
Wallhead, Richard C.



Sullivan, J.
Watson, W. M. (Dunfermilne)
TELLERS FOR THE AYES.—


Sutton, J. E.
Westwood, J.
Mr. Allen Parkinson and Mr. Charles




Edwards.


NOES.


Acland-Troyte, Lieut.-Colonel
Fermoy, Lord
Meller, R. J.


Albery, Irving James
Forestier-Walker, Sir L.
Merriman, F. B.


Alexander, E. E. (Leyton)
Foster, Sir Harry S.
Meyer, Sir Frank


Alexander, Sir Wm. (Glasgow, Cent'l)
Foxcroft, Captain C. T.
Milne, J. S. Wardlaw-


Allen, Lieut.-Col. Sir William James
Fraser, Captain Ian
Mitchell, S. (Lanark, Lanark)


Ashley, Lt.-Col. Rt. Hon. Wilfrid W.
Fremantle, Lt.-Col. Francis E.
Mitchell, W. Foot (Saffron Walden)


Baldwin, Rt. Hon. Stanley
Galbraith, J. F. W.
Mitchell, Sir W. Lane (Streatham)


Balfour, George (Hampstead)
Gibbs, Col. Rt. Hon. George Abraham
Mond, Rt. Hon. Sir Alfred


Balniel, Lord
Goff, Sir Park
Monsell, Eyres, Com. Rt. Hon. B. M.


Banks, Reginald Mitchell
Graham, Fergus (Cumberland, N.)
Moreing, Captain A. H.


Barclay-Harvey, C. M.
Grattan-Doyle, Sir N.
Nail, Colonel Sir Joseph


Barrett, Major Sir Richard
Greaves-Lord, Sir Walter
Neville, Sir Reginald J.


Beamish, Rear-Admiral T. P. H.
Greene, W. P. Crawford
Newman, Sir R. H. S. D. L. (Exeter)


Bellairs, Commander Carlyon W.
Grenfell, Edward C. (City of London)
Newton, Sir D. G. C. (Cambridge)


Bennett, A. J.
Grotrian, H. Brent
Nuttall, Ellis


Betterton, Henry B.
Guest, Capt. Rt. Hon. F. E. (Bristol, N.)
Oakley, T.


Bird, E. R. (Yorks, W. R., Skipton)
Gunston, Captain D. W.
O'Connor, T. J. (Bedford, Luton)


Boothby, R. J. G.
Hacking, Captain Douglas H.
O'Neill, Major Rt. Hon. Hugh


 Bourne, Captain Robert Croft.
Hall, Lieut.-Col. Sir F. (Dulwich)
Oman, Sir Charles William C.


 Bowyer, Capt. G. E. W.
Hall, Capt. W. D'A. (Brecon & Rad.)
Ormsby-Gore, Rt. Hon. William


Brass, Captain W.
Hanbury, C.
Perkins, Colonel E. K.


Brassey, Sir Leonard
Hannon, Patrick Joseph Henry
Perring, Sir William George


Briggs, J. Harold
Harland, A.
Peto, Sir Basil E. (Devon, Barnstaple)


Brittain, Sir Harry
Harmsworth, Hon. E. C. (Kent)
Peto, G. (Somerset, Frome)


Broun-Lindsay, Major H.
Harrison, G. J. C.
Pilcher, G.


Brown, Col. D. C. (N'th'l'd., Hexham)
Hartington, Marquess of
Pilditch, Sir Philip


Buchan, John
Harvey, G. (Lambeth, Kennington)
Pownall, Sir Assheton


Buckingham, Sir H.
Headlam, Lieut.-Colonel C. M.
Price, Major C. W. M.


Bull, Rt. Hon. Sir William James
Henn, Sir Sydney H.
Radford, E. A.


 Burney, Lieut.-Com. Charles D.
Herbert, Dennis (Hertford, Watford)
Raine, Sir Walter


Butler, Sir Geoffrey
Hills, Major John Waller
Rawson, Sir Cooper


Cadogan, Major Hon. Edward
Hogg, Rt. Hon. Sir D. (St. Marylebone)
Reid, D. D. (County Down)


Campbell, E. T.
Holbrook, Sir Arthur Richard
Remer, J. R.


Cassels, J. D.
Holt, Captain H. P.
Remnant, Sir James


Cayzer, Sir C. (Chester, City)
Hope, Sir Harry (Forfor)
Rice, Sir Frederick


Chadwick, Sir Robert Burton
Hopkins, J. W. W.
Richardson, Sir P. W. (Sur'y, Ch'ts'y)


Charteris, Brigadier-General J.
Hopkinson, Sir A. (Eng. Universities)
Roberts, Sir Samuel (Hereford)


Churchill, Rt. Hon. Winston Spencer
Horlick, Lieut.-Colonel J. N.
Robinson, Sir T. (Lanes., stretford)


Churchman, Sir Arthur C.
Hudson, Capt. A. U. M. (Hackney, N.)
Ropner, Major L.


Clarry, Reginald George
Hudson, R. S. (Cumberl'nd, Whlteh'n)
Russell, Alexander West(Tynemouth)


Cobb, Sir Cyril
Hunter-Weston, Lt.-Gen. Sir Aylmer
Rye, F. G.


Cochrane, Commander Hon. A. D.
Huntingfield, Lord
Samuel, A. M. (Surrey, Farnham)


Cockerill, Brig.-General Sir George
Hurd, Percy A.
Samuel, Samuel (W'dsworth, Putney)


Conway, Sir W. Martin
Hurst, Gerald B.
Sandeman, N. Stewart


Cooper, A. Duff
Inskip, Sir Thomas Walker H.
Sanders, Sir Robert A.


Cope, Major William
Jackson, Sir H. (Wandsworth, Cen'l)
Sheffield, Sir Berkeley


Couper, J. B.
James, Lieut.-Colonel Hon. Cuthbert
Simms, Dr. John M. (Co. Down)


Courtauld, Major J. S.
Jones, G. W. H. (Stoke Newington)
Skelton, A. N.


Courthope, Colonel Sir G. L.
Kennedy, A. R. (Preston)
Smith-Carington, Neville W.


Craig, Capt. Rt. Hon. C. C. (Antrim)
King, Commodore Henry Douglas
Somerville A. A. (Windsor)


Craig, Sir Ernest (Chester, Crewe)
Knox, Sir Alfred
Spender-Clay, Colonel H.


Crooke, J. Smedley (Derltend)
Lamb, J. O.
Sprot, Sir Alexander


Crookshank, Col. C. de W. (Berwick)
Leigh, Sir John(Clapham)
Stanley, Lieut.-Colonel Rt. Hon. G. F.


Crookshank, Cpt. H. (Lindsey, Gainsbro)
Lister, Cunliffe-,Rt. Hon. Sir Philip
Stanley, Hon. O. F. G. (Westm'eland)


Cunliffe, Sir Herbert
Loder, J. de V.
Steel, Major Samuel Strang


Curzon, Captain Viscount
Long, Major Eric
Storry-Deans, R.


Dalkeith, Earl of
Looker, Herbert William
Streatfeild, Captain S. R.


Davidson, J.(Hertf'd, Hemel Hempst'd)
Lougher, Lewis
Stuart, Hon. J. (Moray and Nairn)


Davies, Maj- Geo. F. (Somerset, Yeovil)
Lucas-Tooth, Sir Hugh Vere
styles, Captain H. W.


Davies, Dr. Vernon
Lumley, L. R.
Sueter, Rear-Admiral Murray Fraser


Davison, Sir W. H. (Kensington, S.)
McDonnell, Colonel Hon. Angus
Tasker, R Inigo.


Dawson, Sir Philip
Macintyre, Ian
Templeton, W. P.


Dean, Arthur Wellesley
McLean, Major A.
Thom, Lt.-Col. J. G. (Dumbarton)


Dixey, A. C.
Macmillan, Captain H.
Thompson, Luke (Sunderland)


Drewe, C.
McNeill, Rt. Hon. Ronald John
Thomson, Rt. Hon. Sir W. Mitchell-


Eden, Captain Anthony
MacRobert, Alexander M.
Tryon, Rt. Hon. George Clement


Edmondson, Major A. J.
Makins, Brigadier-General E.
Turton, Sir Edmund Russborough


Elliot, Major Walter E.
Malone, Major P. B.
Vaughan-Morgan, Col. K. P.


Ellis, R. G.
Manningham-Buller, Sir Mervyn
Ward, Lt.-Col. A. L. (Kingston. on-Hull)


Everard, W. Lindsay
Margesson, Captain D.
Warrender, Sir Victor


Fairfax, Captain J. G.
Mason, Lieut.-Col. Glyn K.
Waterhouse, Captain Charles




Watson, Rt. Hon. W. (Carlisle)
Winby, Colonel L. P.
Wood, Sir Kingsley (Woolwich W.)


Wells, S. R.
Wise, Sir Fredric
Worthington-Evans, Rt. Hon. Sir L.


Williams, A. M. (Cornwall, Northern)
Withers, John James
Wragg, Herbert


Williams, Com. C. (Devon, Torquay)
Wolmer, Viscount
Yerburgh, Major Robert D. T.


Wilson, Sir C. H. (Leeds, Central)
Womersley, W. J.



Wilson, R. R. (Stafford, Lichfield)
Wood, E. (Chest'r, Stalyb'ge & Hyde)
TELLERS FOR THE NOES.—




Mr. F. C. Thomson and Mr. Penny.

CLAUSE 9.—(Customs duty on trans- lucent or vitrified pottery.)

Mr. A. V. ALEXANDER: I beg to move to leave out the Clause.
This Clause, which imposes a duty upon certain classes of china and pottery, has been debated at fairly great length on the Money Resolutions and the Second Reading and the Committee stages of the Bill, and I do not propose to occupy much time on the present occasion. At the same time I invite the attention of the Parliamentary Secretary to the Board of Trade to one or two facts. The Minority Report of the Committee which recommended the duty was signed by Mr. George Hayhurst, with whom I am very well acquainted, and who, as hon. Members know, is connected with the movement with which I am associated. In the course, of the previous Debates frequent references were made to that Minority Report. I consider that Report is a complete justification for the action we take in opposing the duty. In previous Debates, perhaps because I have spoken after the Government representative, have not had an answer from the Government to the case which I have submitted based upon the experience of the factory referred to in the Minority Report. That co-operative factory has been described by certain hon. Members opposite, including the hon. Member for Macclesfield (Mr. Reamer), as being one of the most inefficient factories in the Potteries.

Mr. REMER: Hear, hear!

Mr. ALEXANDER: I am very glad to know that the hon. Member for Macclesfield repeats that assertion today. It only increases our justification for asking the House to reject this proposal to place a tax upon pottery. I want to repeat the facts concerning that factory, and to ask the Parliamentary Secretary how, in face of those facts, he can possibly ask the House to impose the duty. This factory was purchased at the request of our constituents in the cooperative movement during the period
when it was difficult to obtain foreign deliveries of china. It could only be obtained by purchase from a close ring of manufacturers in the Potteries. They asked far too high a price; we had to pay, however, and therefore the factory is over-capitalised. They also laid a condition upon us that for five years after the purchase of the factory we must take from the ring at least the same quantities of pottery as we had purchased before buying the factory. Obviously these things were a very great handicap, but in spite of the over-capitalisation made necessary by the high price demanded by the owners, and the handicap of the condition with regard to purchases of pottery, the factory, since it has become a co-operative factory, has consistently secured a surplus upon its transactions which, if it were dealt with on the basis of a private trading company, would show a return of no less than 12 per cent., on the average, upon the high amount of capital invested. In this case referred to again and again by the hon. Member for Macclesfield, the hon. Member for Reading (Mr. H. Williams), and others, I submit that if, in spite of its over-capitalisation and of the fact that it pays trade union wages: if it provides holidays with pay and still shows a surplus of 12 per cent., what becomes of the case put forward of the need of protection for this "dying" industry? There is not a shadow of a case remains for the imposition of this duty.
It is said that the amount of surplus secured in this case is due to the fact that there is a tied market, but that statement is entirely opposed to the fact, because every shareholding society is free to buy when and where it pleases. They are able in this "inefficient" factory to get what they require at a proper price, and they do it in a way which is beneficial to themselves, and yet still pay 12 per cent. on the capital. It seems to me that in face of these arguments, and other arguments which have been put forward, the whole case for the duty falls to the ground. Even if you put on these high duties amounting to 40, 50, 60 or 70 per
cent. of the value of the goods, it will not bring the price of the foreign article into real competition with bone china and translucent china. The real joy in regard to the duty comes from those who are going to get the benefit of the restrictions placed on foreign supplies, the earthenware manufacturers who made no application for a duty. I do not wish to state my case at any great length, but there is overwhelming evidence for supporting our view that this tax upon the consumer is totally unjustifiable by all the facts of the industry.

Mr. SULLIVAN: I beg to second this Amendment.
A good deal has been said on behalf of this duty by supporters of the Government, but at the end of the day we find that they have satisfied nobody. My objection to this Clause is that it presses more heavily on the people who use cheap pottery than upon those who use the finer article. For these reasons, I think the House will be well advised to reject this Clause, and to remember that the Government have tried this principle before at a General Election, and they are likely to get the same decision when they put the question once more before the electors.

Mr. REMER: There has been so much said upon this particular Clause at previous stages of the Finance Bill that I do not intend to say very much on this occasion. I would remind hon. Members that the reference made by the hon. Member for Hillsborough (Mr. A. V. Alexander) was to some observations which were made after a most violent and vitriolic attack upon several members of the Committee. I have previously stated that we deplore very strongly people being put into a judicial position in regard to Safeguarding Committees, and then subjected to violent attacks upon their impartiality. It was only after those attacks had been made that we retaliated with an attack upon Mr. Hayhurst who signed the Minority Report. It was Mr. Hayhurst who said the Longton potteries were inefficient. Let me remind the hon. Member for Hillsborough that although all the other members of the Committee visited several potteries in Longton Mr. Hayhurst only visited one.

Mr. ALEXANDER: That statement is quite untrue, because I have made personal inquiries about it.

Mr. REMER: I do not accept the hon. Member's statement.

Mr. ALEXANDER: My authority is Mr. Hayhurst.

Mr. REMER: I will let that pass. The hon. Member for Hillsborough has stated that this factory has made a profit of 12 per cent. If all factories were placed in the position of the particular factory in question, where you have a protected market and a preference over your competitors, they would achieve the same results. That is the whole point of the Protectionist case, and I that is what you have to do if you want to make your factory a profitable concern. It is not merely the price of the commodity or the wages you have to pay, but the most important thing is to keep your factory going full time, thus reducing your standing charges and your rent, rates and taxes to such a minimum that you can pay higher wages and increase the profits to the shareholders and still produce your goods at a lower price. There are scores of cases of that kind, showing that the safeguarding proposals have been a success, and I am sure that the duty we are discussing will be an equal success when it has had time to develop. The result will be cheaper pottery, higher wages for the workpeople, more employment, and a better state of affairs all round for the industry.
The hon. Member for West Waltham-stow (Mr. Crawfurd) made an attack upon myself in regard to a statement I made in regard to this duty, and it referred to the question of balance-sheets. I have since had an opportunity of making full inquiries into the particular case which the hon. Member mentioned, and while I admit that if you dot the "I's" and cross the "T's" my original statement may not have been strictly accurate, yet it was so nearly accurate that I will state exactly what happened. In the particular instance mentioned, during the whole of the applicant's case before the Safeguarding Committee not a word was mentioned about balance-sheets. The opposing counsel, to use, a
vulgarism, began to make a song and dance about a matter which had hardly been mentioned during the whole of the hearing of the case. When this matter was referred to by the applicants' counsel, the chairman did make the observation that he did not regard it as a suitable matter to bring forward at that particular point. Therefore, my original statement that the applicants in the ease had never been asked for balance-sheets was literally true, and, although I may have transgressed by not quite accurately stating the case in the first instance, my statement was so nearly accurate that submit that the House will probably forgive me if I did not, as I have said, dot my "I's" and cross my "T's." As I have said, I believe that this duty is going to bring new hope to the district of Longton, and I want to repeat that, while we heard from the Labour benches a number of speeches from people many miles away from Longton, yet from Hanley, from Newcastle-under-Lyme, or from Burslem not one speech have we heard, although they must know—

Mr. GILLETT: The hon. Member for Burslem (Mr. MacLaren) spoke.

Mr. REMER: He spoke at a very late hour. I heard his speech.

Mr. HARRIS: The right hon. Gentleman for Newcastle-under-Lyme (Colonel Wedgwood) also spoke.

Mr. REMER: On the last day of the Committee stagy the right hon. Gentleman did not make a speech of any kind. I think it is a notable thing that these Gentlemen, who know the conditions, who know the unemployment which exists and which we have reason to believe will now disappear from t he Potteries, have not come to state the case on behalf of the Potteries. I would particularly make reference to the hon. Member for Hanley (Mr. Clowes), because he is a paid official connected with the pottery workers of the district, and it is a very striking thing that he, being a trade union official in the industry, should not have been in his place at any time while the Debate has been proceeding. I would submit that this duty is going to be of very great advantage to the pottery industry, and I am sure that those
Members who oppose it will be very sorry for the electoral disadvantage to their party when the next Election comes.

Mr. CRAWFURD: I should like to apologise to the hon. Member for Macclesfield (Mr. Remer) for not being in the House when he began his speech. I had not anticipated that the matter would arise quite so soon. I think it is due from me to say something in reply to what the hon. Member has just said, and I say at once that I regret very much that he has not taken the opportunity to withdraw completely what he said. I am going to read again what the hon. Member said on the 28th April during the Report stage of the Budget Resolution. I have the OFFICIAL REPORT of that date in my hand:
A further statement was made that the manufacturers who were the applicants in this case refused their balance-sheets.
There cannot be anything more categorical than that. He then went on to say:
That statement is not correct. The statement was made at the last minute by Mr. Comyns Carr.—[OFFICIAL REPORT, 28th April, 1927; col. 1088, Vol. 205.]
As I said on a previous occasion, Mr. Comyns Carr is not only a past Member of this House, but is a very eminent barrister, who has taken part in many of these inquiries, and who over and over again has pressed and stressed this particular point that applicants should show their balance-sheets. The hon. Member said that this statement that the balance-sheets were asked for was not correct. As a matter of fact, the balance-sheets were asked for on the 5th, the 10th and the 12th days of the inquiry—

Mr. REMER: It is very strange that the Chairman of the Potters' Society knew nothing about it.

Mr. CRAWFURD: It is very strange indeed, but not nearly so strange as that he should have misinformed the hon. Member, if, indeed, he said that.

Mr. REMER: It is equally strange that the two other members of the Committee were also misinformed.

Mr. CRAWFURD: All I can say is that, on the 5th, the 10th and the 12th days of the inquiry, these balance-sheets were asked for. On the 13th day of the inquiry, Mr. Comyns Carr, who represented
those who objected to this duty, commented on this. The 13th day of the inquiry was the 25th January. The inquiry closed on the 15th February, and yet the hon. Member says:
That statement was not correct. The statement was made at the last minute by Mr. Comyns Carr.
That is to say, the last minute before the 15th February was the 25th January.
The other point was that the Chairman of the Committee made some comment. I have in my hand the transcript of the shorthand notes made on the 25th January, which was the 13th day of the inquiry. That was the day when Mr. Comyns Carr made this statement. He said:
Every one of these manufacturers has resolutely declined to produce a balance-sheet.
That was nearly a month before the end of the inquiry. He went on:
Not one balance-sheet has been put before you. The only one is the balance-sheet, or rather the prospectus, of the Cauldon Company, with extracts from its balance-sheet, which I can put before you because it is a public issue.
Says the hon. Member, when this statement was made, the Chairman intervened to say that it was unfair.

Mr. REMER: What I said was that Mr. Faraday made some observations about the statement to which the hon. Member has just referred, and the Chairman of the Committee did at that time say that it was unfair to make such observations.

Mr. CRAWFURD: The hon. Member is still repeating something that he said the Chairman said, but I have in front of me the report of the proceedings on this particular occasion, which was not the last minute of the inquiry, but was three weeks before the end of the inquiry, when Mr. Comyns Carr made this complaint referring to the past. Obviously, there must have been some mention of balance-sheets, and some demand for balance-sheets, or Mr. Comyns Carr would have been interrupted at that point.

Mr. REMER: Is the hon. Member quoting from Mr. Comyns Carr's final speech?

Mr. CRAWFURD: No, I am quoting from the speech which Mr. Comyns Carr made on the 25th January, in, I think,
opening the case for the objectors. When he referred to the Cauldon Company, the Chairman said:
None of these manufacturers are public companies.'
That is the intervention of the Chairman. It was not a complaint about the statement of Mr. Comyns Carr. The Report goes on:
Mr. COMYNS CARR: No.
The CHAIRMAN: They are all private.
Mr. COMYNS CARR: When I speak of other inquiries, in every inquiry I have taken part in, the manufacturers, in camera, have produced their balance-sheets for inspection. We have had no balance-sheets here. We have challenged them, we have asked for them, and they have refused them.
That is the statement made before the Committee by Mr. Comyns Carr—as categorical a statement as you could possibly have. Surely, if the chairman, or any member of the committee, had any complaint to make, he would have made it on that occasion, which was, as I have said, three weeks before the end of the inquiry. I say again, as I said on a previous occasion, that people like the hon. Member for Macclesfield would not be misled into this kind of position if the demand which we have always made were satisfied by the President of the Board of Trade. I understand that when any of these committees come to the end of their deliberations, and give their conclusions to the right hon. Gentleman, he is supplied with a copy of the transcript of the shorthand notes of the evidence. I believe that goes to him on every occasion. The evidence is available to him, but it is not available to the Members of the House, and it seems to me, especial y in view of what has happened with this particular inquiry, and the question we have been discussing, that it is a monstrous thing that Members of the House should be asked to pass their judgment on these matters without seeing the evidence on which the conclusions are come to. A jury in a Court of Law who are asked to decide upon matters of fact not only hear counsel and the summing up of the Judge, but the evidence that is tendered on oath to the Court and they are the people who give the verdict.
This House is in the position of a jury. We are asked to give a verdict. We listen to ex parte statements, and we
can read the summing up of the Committee, but we are not given a chance to see the evidence brought by the two sides, upon which our conclusions should be based if they are to be just and right and fair conclusions. We on this side—I believe I speak for hon. Members above as well as below the Gangway—are not satisfied with the way in which these committees have been handled by the right hon. Gentleman. We are not satisfied, for instance, that he has been content in every case to appoint three members only of the Committee. We are not satisfied that on some occasions one member of a committee only has heard the evidence given. We are not satisfied that in the case of the committee on cutlery there was not some undue influence used by the right hon. Gentleman's Department to cause that Report to be hurried to its conclusion.

Mr. DEPUTY-SPEAKER: (Mr. James Hope): The hon. Member is now dealing with another committee.

Mr. CRAWFURD: I apologise, but there is plenty to say about this committee. We are not satisfied that in this instance the right hon. Gentleman has not appointed to this committee people who are notoriously biased in one direction. [Interruption.] No, I do not. The right hon. Gentleman is wrong. It seems to me to be a pity that he is not able to rise to the conception of these matters being decided by people who are not notoriously biased.

The PRESIDENT of the BOARD of TRADE (Sir Philip Cunliffe-Lister): I have appointed a great many Liberals.

Mr. CRAWFURD: That does not make the case any better. That intervention and the spirit in which it is received, is an admirable illustration of what I mean. Neither the right hon. Gentleman nor hon Members opposite have any conception at all of the way in which these matters ought to be handled. When people are coming to a Government Department to ask that duties which will take money out of the pockets of the general consumer, and put it into their pockets, should be imposed, at least we are entitled to ask that the bodies that decide these questions should be impartial and as far as possible, judicial in character. It does not matter whether the
bias is on one side or the other. It is equally bad. I should also like to ask the right hon. Gentleman this: The Committee finished its deliberation, I believe, about 3 o'clock one afternoon. One Member left London for the country the next day and the other left England for South America. How, under those circumstances can we accept the Report that has been given as a considered and impartial review of the evidence tendered to the Committee? From beginning to end, this machine set up by the Government to get round, by a back door, the pledge given by the Prime Minister at the last election is characterised by all the suspicion of trickery and bias which accompanies tariff-mongering in every country.

Mr. PETHICK-LAWRENCE: The hon. Member has dealt very faithfully with the hon. Member for Macclesfield (Mr. Remer) as far as the matter of balance sheets is concerned, but the hon. Member for Macclesfield made two other charges against the attitude that we take on this side of the House. In the first place, he said none of the Members representing those districts and speaking from these benches had defended the attack upon this Clause. It was pointed out to him that two Members at different times had spoken. He called attention to the fact that other Members for the district had not spoken. The point is this: We who are Free Traders have always admitted that if you put on a duty it will probably benefit the people who are actually producing that particular article. What we have always said is that the very small benefit which may be conferred upon the people producing that particular article more than offset by the disadvantages to the people of the country as a whole, and I should still be against this duty even if all my friends on this side, realising that some advantage might accrue to their constituents, had come forward in support of the duty. The remarkable fact is that none of the Members representing those constituencies on this side came forward to support the duty, and that, so far as the inquiry was concerned, the particular trade union involved definitely decided not to be represented in favour of the duty.

Mr. REMER: Or to oppose it.

Mr. PETHICK-LAWRENCE: That is true. They decided to remain neutral.
That is a very extraordinary thing, and in view of the allegations that this was going to benefit the industry, it is very remarkable that the workmen's side definitely came to the conclusion that it was not worth their while to support the application for a duty. Then the hon. Member for Macclesfield dealt with the co-operative factory, and he thought he had made an answer to my right hon. Friend by saying they had a tied market. That, like many of his other statements, is entirely without foundation. They have not a tied market, either in theory or in fact. It is quite a recognised thing in the co-operative business for the local co-operative establishments to buy in the outside market and not to give their trade in particular products to the Wholesale Co-operative Society, and in this case that is true. In order to secure the market of the local co-operative stores, the Wholesale Co-operative Producing Society have to compete in the open market with the other industries.
The hon. Member for Macclesfield accused us of attacking the personnel of the Committee, but why have we done that? Because, in our view, the President of the Board of Trade and the Chancellor of the Exchequer have not fulfilled the functions it is their proper duty to perform. This process of safeguarding should be carried on, as we understand the proceedings, by a judicial Committee to examine witnesses and study the facts judicially, and on those facts the Chancellor of the Exchequer should base his decision, and be prepared to defend it himself. As a matter of fact, that has not been done. What has been done is this. First of all, so far as the Chancellor of the Exchequer is concerned, he deliberately absents himself from all these discussions. The President of the Board of Trade generally simply says, "The Committee has come to a decision, and you have got to accept that decision." It is in consequence of that that we are forced to consider what right these three people, appointed originally by the President of the Board of Trade, have, by a majority of one, to come to a decision, which decision is practically binding on this House. That is what we object to, and that is why, if that be the policy and method of proceedings adopted by
Government, we are then compelled to take a course which we should not otherwise take of examining the qualifications of the Committee and their method of taking their evidence to see whether they are fit to arrive at a decision which is binding upon the country as a whole.
I come to the President of the Board of Trade. In the course of the Committee stage on this proposal he defended this Duty on the ground that this Felspar china was, in fact, in competition with the Longton china, and he did it on the ground that you can make an article of Longton china and you can make Felspar china and that you would not be able to distinguish one from the other; and, therefore, he says that is sufficient proof that, although made of different materials, they are, in fact, in competition with each other. That is not the case. The real position is, that the Longton china article is a great deal more expensive than the Felspar article, and that, though it is quite possible if you were to make a similar article of the two materials you would not be able to distinguish one from the other, in point of fact, you can always distinguish them by the enormous difference in price. It is because of that enormous difference in price that they are not in competition. Longton china is only suitable for articles which are going to be articles of luxury, and these articles are only bought by people who can afford a long price. The Felspar articles are cheap articles, or were before the Duty was imposed, and they have been bought by people who could only afford a cheap article. They came into competition not with Longton china but with earthenware and, as the hon. Gentleman the Member for Bethnal Green South-West (Mr. Harris) told us last time, with tin mugs and other things with which they were comparable in price. So long as the Longton manufacturers put upon their articles the very large prices which they are asking to-day they are not really even benefited by this Duty because the price, even with the Duty, does not come within the range of the Longton china article.
I come to another point brought forward by the President of the Board of Trade when we had this matter before us on the last occasion. Perhaps he will be kind enough to give me his attention on this point. In the course of defending
the general duty he explained that the imports measured by weight had been going steadily up, and he said not only were they going up in 1926—which, of course, he must recognise as well as I, was quite an abnormal year and is quite unfit for comparison—but that if you went to the time when the coal dispute was at an end, the first four months of this year showed that the imports had continually risen right up to the imposition of the Duty. That was an argument, in his opinion, to prove that the imports were abnormal and it was perfectly right the Duty should be imposed. Later on, however, I moved the Amendment to alter the date from when it was proposed to be put on on the ground that people had had no notice and that many freights were on the sea and it was very unfair to deal with them. The President of the Board of Trade then changed his tune, because he then said the amount of import duty in the earlier months of this year had shown that the importers were fully alive to the possibility of this duty being imposed. The President of the Board of Trade cannot have it both ways!
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Either the large quantities imported in the earlier months of the year are really due to the gradual growth of the trade that would have taken place if no duty had been put on or they are due to the expectation that the duty was going to be imposed. He cannot use the same figures in two opposite directions twice on the same subject. He must either recant from one or the other. He must either admit that the higher weight of articles coming in was due to the expectation of the duty, in which case his whole case for the abnormality of the increase disappears at once, or, if he prefers to take those figures as evidence in weight as still being an increase, then he cannot argue that they were put on in expectation of the duty. But he has preferred to take both, and I leave him to choose which one or the other he will take as the sound argument he proposes to put before us this evening.
I only wish to touch upon one or two further points before I sit down. The President of the Board of Trade attempted to argue that this amount of 3⅓ per cent. is really met by 28s. per cwt. duty. We have maintained that 28s a cwt. duty is really the equiva-
lent of far more. In order to prove his case he chose to take a certain consignment. He said, I think, it was a 975 cwts. consignment and it was a sample produced by a gentleman who was a principal witness on behalf of the opponents. He goes into a great many figures and he works out that on that consignment the duty would be 34 per cent. I would like to put to him, or to whoever is going to answer on behalf of the Government, this question: Is that typical of all the imports that have taken place. I understand it is not. I understand that the figures given by the hon. Member for Reading (Mr. H. Williams) are more nearly correct and that the average, taking all the facts, is at least 42 per cent. If that is not so, perhaps the President of the Board of Trade will tell us what is the average result, taking all the facts together. I am not including the very expensive china, because, as I said, when this matter was before the House on Second Reading, if you chose to add the very few per cent., which is the duty on chinaware worth several pounds as against several shillings for cheaper china you will, no doubt, bring the duty down. But we are concerned for the common people of this country who are being mulcted in duty or prevented from buying articles in order to bring this vary hypothetical advantage to a luxury trade.
I had hoped that on the last occasion the President of the Board of Trade would have met us over the question of the date. Although I know that he refused us then I still hope that he will make some concession to us to-day. If he does not do so, I feel that this particular duty is one of the most scandalous that the Government have put on under the pretence of this safeguarding procedure. It violates the fundamental principles of taxation; it violates in spirit the pledge which was given by the Prime Minister in regard to safeguarding procedure, and it raises the price of articles of common consumption in the very hypothetical interests of a luxury trade.

Mr. ERNEST BROWN: I do not rise to add anything to the general discussion. but only to raise two points. One of the reasons which makes me dubious about this duty is that there is a great deal of dubiety as to precisely the articles to
which the duty is to apply. In the Committee stage, certain Amendments were moved attempting to exclude from the operation of the duty certain kinds of translucent pottery. The President of the Board of Trade met us in regard to certain fancy articles, but there is a great deal of dubiety about cooking utensils, such articles as are not used as table ware, such as milk boilers, pie dishes, baking dishes, souffle dishes and things of that sort. I understand, but I am not sure, that the Customs officials in administering the duty are treating these articles as if they are not affected by the duty. As there is a great deal of dubiety about it, I should welcome a statement from whoever is to reply as to whether these articles which are not produced in this country, at Longton or anywhere else, and consequently there is no industry to safeguard, do or do not come under the operation of the duty.
There is, further, the effect that the duty has had on the trade. The House having listened to the hon. Member for Macclesfield (Mr. Remer) with his assurances of lower prices, higher wages and more employment may be interested to hear what the "Pottery Gazette and Glass Trade Review" of the 1st July has to say about the operation of the duty in so far as it has gone:
It is at once apparent to anyone who has occasion frequently to tour the Potteries, and who is at all competent to judge the state of the market, that there is no 'tone' in trade at the present time. It can safely be said that there are, indeed, few factories which are busy, and many manufacturers seem to be quite unable to explain the paucity of orders and the daily reports of their travellers that there is little disposition on the part of the average retailer to make up anything like a decent journey order. This, in view of the tariff which is now operative upon foreign china, might, at first, seem to constitute a paradox, but when one looks into the matter more closely there would seem to be a definite explanation to the fact that few stocks require replenishing for the moment. There has undoubtedly been very heavy buying of Continental china prior to and during the Safeguarding Inquiry, and the buying of these heavy stocks has, without doubt, caused the tying up of a good deal of ready money. Not only has this affected the London importers and wholesalers, but also the provincial dealers, some of whom have been courageous enough to tell the Staffordshire manufacturers very plainly what their position is: for the moment they can neither order nor meet their accounts with
that regularity which has been their custom in times past. 'You must wait until we have got rid of some of this heavy stock of Continental ware that we have on hand,' one or two of the bigger buyers are reported frankly to have told the travellers. All this is very disconcerting, to both the travellers and the manufacturers, some of whom are beginning to wonder whether the duty is not actually doing them a bad turn. However, the more long-sighted of our manufacturers are gradually becoming more reconciled to the idea that, given time, the trade of the Potteries is bound to benefit by the higher prices which will assuredly have to be asked for foreign china in view of the heavy duty which is now having to be paid on the arrival of foreign packages weighing, say, five to six cwt. It is only now that the dealers are beginning to realise what the duty really means to them in actual terms of £ s. d.
The article goes on to say:
There are, indeed, many lines which will now have to be changed over by retailers from foreign china to English earthenware, and, to some extent, the earthenware houses or the Potteries have already received practical evidence of this.
That is only part of a very long article, but it is sufficient to show that the argument produced from below and above the Gangway on this side of the House is correct, that the case made out for this duty is not sufficient to warrant the House in passing this Clause to-night. I have very great pleasure in supporting the rejection of the Clause, and I hope that, even at the last moment, this kind of evidence will persuade the President of the Board of Trade to withdraw the Clause, which is doing harm not merely to the trade in the Potteries but is helping to restrain trade at the ports and adding to the Customs staff and the expenditure of the country on that staff.

Sir B. CHADWICK: A good deal of the Debate has been spent on charges and counter-charges on one side and the other. The hon. Member for Hillsborough (Mr. A. V. Alexander) opened the Debate by referring to the pottery factory which, I understand, is associated with the body he so ably represents in this House. He wanted to know why if that pottery factory was efficient we impose a duty to help it. He then proceeded to prove that the factory was not inefficient but was perfectly efficient and paying a 12 per cent. dividend and, therefore, did not need the duty. It is just as well to bring to the notice of the House the motives which have actuated the Government in imposing this duty. Here we
have an industry employing some 8,000 people, who are part of a larger community of some 60,000, 70,000 or 80,000 people directly concerned in the industry, and again those people are part of a community of 250,000 people directly and indirectly concerned in this industry. This industry is suffering from foreign competition, and that is one of the main reasons for the duty. This bone china is in direct competition with the cheap material coming from Czechoslovakia. That is one of the main considerations that have actuated the Government.
There is one point which I must make, because almost every speaker has referred to it, and that is the absence from the inquiry of the workers in the industry. Why were they not there, it has been asked. Why were they not there? I have been through many of the potteries in Staffordshire and I have spoken to the workers in the industry. I was not introduced to them by anybody; they did not know who I was, but I obtained the most remarkable evidence of the eagerness and earnestness with which the workers were looking forward to the imposition of this duty. The answer is better known to hon. Members opposite than it is to me why the workers in this industry did not come forward to participate in the inquiry. It is a remarkable fact that the hon. Members who represent the districts primarily concerned are not here to take part in this vital discussion, vital to the life of the people working in this industry. No answer has been made to the query as to whether the workers in this industry were at the inquiry or were represented at the inquiry.

Mr. BROWN: Is there not in this industry one of the most successful Joint Industrial Council of employers and employed and have any representations come from that Committee, which is a representative body of employers and employed?

Sir B. CHADWICK: I do not know whether it is within the province of the joint Industrial Council to make representations for different sections of the industry, but it is true that this industry is remarkable in the peaceful conditions that have existed for more than 25 years. Whether that Joint Industrial Council has made representations or not I do not know, but we do
know that the workers did not take any part in the inquiry. The main thing which has actuated the Government is concern for the people in the industry. That point is not referred to by hon. Members opposite when they argue on these comparatively unimportant points. As to the inquiry and the constitution and appointment of these Committees, about which so much has been said, surely hon. Members opposite will realise that more than 50 per cent. of the Committees which have been appointed by the President of The Board of Trade to examine these industries have recommended no duty. Not one word of protest have I heard from hon. Members opposite, or from hon. Members on this side of the House, in cases where no duty has been recommended; but wherever a duty has been recommended, hon. Members opposite speak of a "packed committee" and accuse the right hon. Gentleman of partiality. The claimants in this case were the representatives of the old English industry of pottery making and the opponents were the London Chamber of Commerce. We think that the much stronger claim is made by the people who are concerned in the industry.
The hon. Member for West Leicester (Mr. Pethick-Lawrence) spoke of the noncompetitive element between these two classes. He is wrong again. The committee took the view that he is wrong, and most ordinary people, who are accustomed to think of these matters in every day practice, people going into a shop to buy cups and saucers, will not consider that there is no competition between articles which in one case cost 3s. 6d. and in the other 4s. 9d. a dozen to produce. There is no doubt that there is direct competition between this bone china industry and the foreign industry. The opponents of the industry say "Abandon your old methods; you are inefficient. Turn over to a new process." They ask these old British Staffordshire potters to abandon methods which have kept them in the forefront of china production for years; and we are told by experts that if they adopted other methods they would not reduce the price of a dozen cups and saucers by a penny. It would not help them, because the people who are competing with them are working on a 30 per cent. and 50 per cent. less wage than the people in Staffordshire. That is all I need say in resisting
this Amendment. The hon. Member for West Leicester criticised the President of the Board of Trade in regard to something he had said, but I confess I could not follow him at all. On the question of the value of the duty in the light of experience since it has been imposed, a duty of 28s. per cwt. has always been said to be far more relatively than a duty of 33⅓ per cent. over these classes of china. In the months since the duty was imposed in April the figures work out in this way. The dutiable imports of china in April were 1,036 cwts., of a value of £4,792; in May there were 6,182 cwts., of a value of £33,600, and in June 5,500 cwts. of a value of £28,558. The rate of the duty in April is equivalent to an ad valorem, duty of 30 per cent., in May to 26 per cent., and in June to 26 per cent. That rather disposes of the terrifying statements made by the hon. Member.

Mr. LEES-SMITH: I have sat through all the discussions upon this Pottery Duty, and I have never heard any reply from the Government Bench which has been so entirely inadequate. The Parliamentary Secretary has told us that there are 8,000 persons unemployed in the Longton china trade, and he has said that we show no regard for that predicament because we will not accept this particular proposal. But throughout the Debates no attempt has been made to show that, whatever unemployment there may be in this trade, it is going to be in any way affected by a duty on articles imported from abroad, and no attempt has been made to answer the ordinary causes which are assigned to the position of this trade by those who have inquired into it. The facts about the Longton china trade are that it makes a very beautiful but very expensive article, which from its nature must be confined to something in the nature of a luxury demand. It has also been shown, and not denied, that there is in this trade some sort of price agreement, I will not say it is a ring, and that in certain typical articles selected for examination, as a result of that price agreement, the price of the article has been increased by 400 per cent. as compared with the period before the war. If you come to the position which is represented there, when you come to treat with a luxury article for which, as a result of our present conditions, the demand is bound to be more restricted than before
the War, and when you deliberately raise the price by a combination, the punishment of that is bound to be felt in a decrease in demand and an increase in unemployment. That is the cause which is commonly assigned to the special difficulties in the Longton china trade, and no speaker who has yet supported these duties has attempted to show that the cause is not in itself quite sufficient for the unemployment to be found there.
The Parliamentary Secretary to the Board of Trade has said that the Joint Industrial Council had no right to make representations on this matter. As a matter of fact, the matter came before the Joint Industrial Council, and the employers' side of the council moved a resolution that, as the Joint Industrial Council, they should support this application, but the workers' side refused to have any part or lot in this particular proposal. If you ask the reasons, they are the reasons which we have stated and have been stating in these Debates for the last two months, namely, that this duty, while it may assist certain trades and workers in other industries, will not assist the workers in the Longton china trade, because this china from abroad, which has been discussed in this Debate, is not in any real or effective competition with the products they manufacture. This china from abroad, though it is called china, is made by a different process and sells on a different market and is made for a different demand.
The Parliamentary Secretary has stated that the wages paid in Czechoslovakia and Germany are about 30 per cent. lower than the wages paid in this country. It has been shown that if in this country all the men worked for nothing, the china from abroad, made by the felspar process. would still be sold in this country at a price which does not cover our overhead charges. It is a cheap article, an article made for ordinary bazaars, and an article which is not bought by the same market as the expensive and elaborate china produced in Longton. The cost of the raw material is only about one-quarter of the cost of the raw material for Longton, and you cannot bridge this chasm in costs by any tariff which this House can conceivably impose. The consequence must be that whatever tariff is put on—even though the price of this china from abroad may be raised by 33⅓ per cent.—
nevertheless, it will not be selling on the same market and in the same field of competition as the bone china made for the luxury trade.
For that reason, the workers in this bone china trade know that this felspar china has, as a matter of fact, nothing to do with the product for which they are responsible. Who is going to be assisted? It is this last factor to which I wish to call the attention of the House, because throughout all these discussions this mysterious obscurity has never been cleared up. There are some manufacturers who will be assisted by this duty, and they are the manufacturers of earthenware. They are in competition with felspar, and they produce a product which cannot be told apart from felspar. In the very dining room of this House there are cups of earthenware and saucers of felspar china and no Member can tell the difference between them and they are sold at competitive prices. They are made for the same market at the same price. The exclusion of felspar china from abroad will undoubtedly be of benefit to them, but they did not ask for a tariff, and, if they had asked for a tariff, they would not have been able to fulfil a single one of the conditions which the White Paper lays down. They have got a tariff by these manufacturers of bone china having somehow or other been placed in front, and so we have now reached the ridiculous and scandalous position that, as a result of an application for a tariff from manufacturers of a luxury article, a tariff has finally been given to manufacturers of necessities which enter into the cost of living of every home in this land.

Sir BASIL PETO: I should like to say a word or two in reply to the speech to which we have just listened. The hon. Member has said that there is a great deal of unemployment in this industry, and that from this side of the House we have not shown that the result of this duty is going materially to affect employment. My view with regard to that is that if you have a series of duties, all of which have produced a marked result upon the unemployment figures in the industries concerned, it is a fair assumption that at any rate there is a probability that the imposition of the duty will have a material effect on employment in the pottery industry, broadly
speaking, as a whole. The Hon. Member says that the Langton china manufacturers never enter into competition with the felspar. He envisages two absolutely watertight compartments in one of which there is a demand for the one article and in the other there is a demand for the other article. But I hold that is an entirely wrong view to take of the course of any trade. There is no doubt that there are many factors which influence people in their purchases, and among them is the very widely distributed desire, in purchasing the daily needs of every household, to do something to find employment for the people of this country. If the difference is so enormous as between the cost of the foreign product and the home-made article, in many cases that may turn the scale, but though a duty of 28s. per cwt may not be sufficient, as the hon. Member says, to equalise or anything like equalise, this difference, it may in many cases enable people to make up their minds to purchase British china in preference to foreign felspar china which comes in and takes its place.
The hon. Member says that really what is going to happen is that some other branch of British workers, namely, those who are engaged in the earthenware industry, are going to be the people who will benefit. Why should we take such a narrow view in this House as to say that if there is any class of workers in any industry in this country which is going to benefit we should—just because it is not precisely the class of worker in one particular department of an industry that is going to benefit—therefore repeal or rather not enact at all a Clause of the Finance Bill which has already been in operation. The hon. Member says it is not precisely the body of workers which the Clause claims to benefit who are going to be the people who will really benefit in their employment, but I take the view that, if in the present state of employment in this country, we can help employment in any branch of industry, we should be very ill-advised on no evidence whatever and in the face of the evidence of every other industry which has been safeguarded, to refuse to enact a Clause which is already in operation. I cannot conceive of a more narrow-minded argument than that put before the House from the Front bench opposite. It is really a case of a dog-in-the-manger argument, that because you cannot claim that
you are going to benefit most precisely the people you set out to benefit, therefore, you should repeal or rather not enact this Clause at all.
I ask the House to consider this further point. This is a Clause which has been in operation for a month or two, and we have no evidence yet as to how it is going to work. We have evidence as to how every other Safeguarding Duty has operated in improving employment in this country. [HON. MEMBERS: "NO!"] At any rate, we have diminished imports in every case. That means a larger share of the home market for those employed in the industries in this country. That in face of that fact we should turn round and say, "We shall not enact this Clause or give it even a year to find out how it will operate." seems to me to be a counsel that no responsible body of legislators would consider for a moment. It is certainly not a counsel which would be

considered in this House. Let us admit that the hon. Member's argument might be appropriate two years hence, if he were then able to show on facts and figures that the imposition of the duty had produced no amelioration of the lot of the people engaged in the pottery and earthenware industry. Then he could say that the duty had been in force for two years, which was a sufficiently long time for some judgment of its operation to be made, that it had not operated to advantage, and that we should not continue it. But he has asked us to take out of the Bill a Clause that has never been tried and tested, and which, on the analogy of every similar Clause relating to every other industry, has done good, and he has asked us to do that in the name of the Labour Party.

Question put, "That the words proposed to be left out stand part of the Bill."

The House divided: Ayes, 244; Noes, 122.

Division No. 270.]
AYES.
[9.39 p.m.


Acland-Troyte, Lieut.-Colonel
Cockerill, Brig.-General Sir George
Graham, Fergus (Cumberland, N.)


Albery, Irving James
Conway, Sir W. Martin
Grattan-Doyle, Sir N.


Alexander, E. E. (Leyton)
Cope, Major William
Graves-Lord, Sir Walter


Alexander, Sir Wm. (Glasgow, Cent'l)
Couper, J. B.
Greene, W. P. Crawford


Allen, Lieut.-Col. Sir William James
Courtauld, Major J. S.
Grenfell, Edward C. (City of London)


Ashley, Lt.-Col. Rt. Hon. Wilfrid W.
Courthope, Colonel Sir G. L.
Grotrian, H. Brent


Baldwin, Rt. Hon. Stanley
Cowan, Sir Wm. Henry (Islingtan, N.)
Guest, Capt. Rt. Hon. F. E. (Bristol, N.)


Balfour, George (Hampstead)
Craig, Capt. Rt. Hon. C. C. (Antrim)
Gunston, Captain D. W.


Balniel, Lord
Craig, Sir Ernest (Chester, Crewe)
Hacking, Captain Douglas H.


Banks, Reginald Mitchell
Crooke, J. Smedley (Deritend)
Hall, Lieut.-Col. Sir F. (Dulwich)


Barclay-Harvey, C. M.
Crookshank, Col. C. de W. (Berwick)
Hall, Capt. W. D'A. (Brecon & Bad.)


Barnett, Major Sir Richard
Crookshank, Cpt. H. (Lindsey,Gainsbro)
Hanbury, C.


Beamish, Rear-Admiral T. P. H.
Cunliffe, Sir Herbert
Hannon, Patrick Joseph Henry


Bellairs, Commander Carlyon W.
Davidson, J. (Hertf'd, Hemel Hempst'd)
Harland, A.


Bennett, A. J.
Davies, Maj. Geo. F.(Somerset, Yeovil)
Harrison. G. J. C.


Betterton, Henry B.
Davies, Dr. Vernon
Hartington, Marquess of


Bird, E. R. (Yorks, W. R., Skipton)
Davison, Sir W. H. (Kensington, S.)
Harvey, G. (Lambeth, Kennington)


Boothby, R. J. G.
Dawson, Sir Philip
Heneage, Lieut.-Col. Arthur P.


Bourne, Captain Robert Croft
Dean, Arthur Weliesley
Herbert, Dennis (Hertford, Watford)


Brass, Captain W.
Dixey, A. C.
Hills, Major John Waller


Brassey, Sir Leonard
Drewe, C.
Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.


Briggs, J. Harold
Eden, Captain Anthony
Hogg, Rt Hon. Sir D.(St Marylebone)


Brittain, Sir Harry
Edmondson, Major A. J.
Hohler, Sir Gerald Fitzroy


Brocklebank, C. E. R.
Elliot, Major Walter E.
Holt, Canptain H. P.


Broun-Lindsay, Major H.
Ellis, R. G.
Hope, Sir Harry (Forfar)


Brown, Col. D. C. (N'th'l'd., Hexham)
Elveden, Viscount
Hopkins, J. W. W.


Brown, Brig.-Gen. H. C. (Berks, Newb'y)
Evans, Captain A. (Cardiff, South)
Horlick, Lieut.-Colonel J. N.


Buchan, John
Everard, W. Lindsay
Hudson, Capt. A. U. M.(Hackney, N.)


Buckingham, Sir H.
Fairfax, Captain J. G.
Hudson, R. S. (Cumberl'nd, Whiteh'n)


Burney, Lieut.-Com. Charles D.
Falle, Sir Bertram G.
Hume-Willams, Sir W. Ellis


Butler, Sir Geofirey
Fermoy, Lord
Hunter-Weston, Lt.-Gen. Sir Aylmer


Butt, Sir Alfred
Fielden, E. B.
Huntingfield, Lord


Cadogan, Major Hon. Edward
Finburgh, S.
Hurd, Percy A.


Campbell, E. T.
Forestier-Walker, Sir L.
Hurst, Gerald B.


Carver, Major W. H.
Foster, Sir Harry S
Inskip, Sir Thomas Walker H


Cassels, J. D.
Foxcroft, Captain C. T.
Jackson, Sir H. (Wandsworth, Cent'l)


Cayzer, Sir C. (Chester, City)
Fraser, Captain Ian
James, Lieut.-Colonel Hon. Cuthbert


Cecil, Rt. Hon. Sir Evelyn (Aston)
Fremantle, Lieut.-Colonel Francis E.
Jones, G. W. H. (Stoke Newington)


Chadwick, Sir Robert Burton
Galbraith, J. F. W.
Kennedy, A. R. (Preston)


Churchill, Rt. Hon. Winston Spencer
Gsnzoni, Sir John
King, Commodore Henry Douglas


Churchman, Sir Arthur C.
Gault, Lieut.-Col. Andrew Hamilton
Knox, Sir Alfred


Clarry, Reginald George
Gibbs, Col. Rt. Hon. George Abraham
Lamb, J. Q.


Cobb, Sir Cyril
Goff, Sir Park
Leigh, Sir John (Clapham)


Cochrane, Commander Hon. A. D.
Grace, John
Lister, Cunliffe-,Rt. Hon. Sir Philip


Lloyd, Cyril E, (Dudley)
Oakley, T.
Streatfeild, Captain S. R.


Loder, J. de V.
O'Neill, Major Rt. Hon. Hugh
Stuart, Crichton-,Lord C.


Long, Major Eric
Oman, Sir Charles William C.
Stuart, Hon. J. (Moray and Nairn)


Looker, Herbert William
Ormsby-Gore, Rt. Hon. William
Styles, Captain H. Walter


Lougher, Lewis
Penny, Frederick George
Sueter, Rear-Admiral Murray Fraser


Lucas-Tooth, Sir Hugh Vere
Perkins, Colonel E. K.
Tasker, R. Inigo.


Lumley, L. R.
Perring, sir William George
Templeton, W. P.


Macdonald, Capt. P. D. (I. of W.)
Peto, Sir Basil E. (Devon, Barnstaple)
Thom, Lt.-Col. J. G. (Dumbarton)


Macdonald, R. (Glasgow, Cathcart)
Peto, G. (Somerset, Frome)
Thompson, Luke (Sunderland)


McDonnell, Colonel Hon. Angus
Pilditch, Sir Philip
Thomson, F. C. (Aberdeen, South)


Maclntyre, I.
Pownall, Sir Assheton
Thomson, Rt. Hon. Sir W. Mitchell-


McLean, Major A.
Price, Major C. W. M.
Tryon, Rt. Hon. George Clement


Macmillan, Captain H.
Radford, E. A.
Vaughan-Morgan, Col. K. P.


McNeill, Rt. Hon. Ronald John
Raine, Sir Walter
Ward, Lt.-Col. A.L.(Kingston-on-Hull)


Macquisten, F. A.
Rawson, Sir Cooper
Warrender, Sir Victor


MacRobert, Alexander M.
Reid, D. D, (County Down)
Waterhouse, Captain Charles


Maitland, Sir Arthur D. Stell-
Remer, J. R.
Watson, Rt. Hon. W. (Carlisle)


Makins, Brigadier-General E.
Rice, Sir Frederick
Wells, S. R.


Malone, Major P. B.
Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Wheler, Major Sir Granville C. H.


Manningham-Buller, Sir Mervyn
Roberts, E. H. G. (Flint)
Williams, A. M. (Cornwall, Northern)


Margesson, Captain D.
Roberts, Sir Samuel (Hereford)
Williams, Com. C. (Devon, Torquay)


Marriott, Sir J. A. R.
Ropner, Major L.
Williams, Herbert G. (Reading)


Mason, Lieut.-Col. Glyn K.
Russell, Alexander West (Tynemouth)
Wilson, Sir C. H. (Leeds, Central)


Melier, R. J
Rye, F. G.
Wilson, R. R. (Stafford, Lichfield)


Merriman, F. B.
Samuel, Samuel (W'dsworth, Putney)
Winby, Colonel L. P.


Meyer, Sir Frank
Sandeman, N. Stewart
Wise, Sir Fredric


Mitchell, S. (Lanark, Lanark)
Sanders, Sir Robert A.
Withers, John James


Mitchell, W. Foot (Saffron Walden)
Shaw, R. G. (Yorks, W. R., Sowerby)
Wolmer, Viscount


Mitchell, Sir W. Lane (Streatham)
Sheffield, Sir Berkeley
Womersley, W. J.


Mond, Rt. Hon. Sir Alfred
Shepperson, E. W.
Wood, E. (Chest'r, Stalyb'dge & Hyde)


Monsell, Eyres Com. Rt. Hon. B. M.
Slmms, Dr. John M. (Co. Down)
Wood, Sir Kingsley (Woolwich W.)


Moore, Lieut.-Colonel T. C. R. (Ayr)
Smith-Carington, Neville W.
Woodcock, Colonel H. C.


Moreing, Captain A. H.
Somerville, A. A. (Windsor)
Worthington-Evans, Rt. Hon. Sir L.


Nail, Colonel Sir Joseph
Spender-Clay, Colonel H.
Young, Rt. Hon. Sir Hilton (Norwich)


Nelson, Sir Frank
Sprot, Sir Alexander



Neville, Sir Reginald J.
Stanley, Lieut.-Colonel Rt. Hon. G. F.
TELLERS FOR THE AYES.—


Newton, Sir D. G. C. (Cambridge)
Stanley, Hon. O. F. G. (Westm'eland)
Captain Viscount Curzon and


Nichloson, Col. Rt. Hn.W.G.(Ptrsf'ld.)
Steel, Major Samuel Strang
Captain Bowyer.


Nuttall, Ellis
Storry-Deans, R.



NOES.


Adamson, Rt. Hon. W. (Fife, West)
Grenfell, D. R. (Glamorgan)
Purcell, A. A.


Adamson, W. M. (Staff., Cannock)
Groves, T.
Richardson, R. (Houghton-le-Spring)


Alexander, A. V. (Sheffield, Hillsbro')
Grundy, T. W.
Riley, Ben


Ammon, Charles George
Hall, F. (York, W. R., Normanton)
Ritson, J.


Attlee, Clement Richard
Hall, G. H. (Merthyr Tydvil)
Robinson, W. C. (Yorks.W.R., Elland)


Baker, J. (Wolverhampton, Bilston)
Hamilton, Sir R. (Orkney & Shetland)
salter, Dr. Alfred


Barker, Walter
Hardie, George D.
Scurr, John


Barker, G. (Monmouth, Abertillery)
Harris, Percy A.
Shaw, Rt. Hon. Thomas (Preston)


Batey, Joseph
Hartshorn, Rt. Hon. Vernon
Shepherd, Arthur Lewis


Bondfield, Margaret
Henderson, Rt. Hon. A. (Burnley)
Sinclair, Major Sir A. (Caithness)


Bowerman, Rt. Hon. Charles W.
Henderson, T. (Glasgow)
Sitch, Charles H.


Briant, Frank
Hirst, G. H.
Slesser, Sir Henry H.


Broad, F. A.
Hirst, W. (Bradford, South)
Smillie, Robert


Bromley, J.
Hutchison, Sir Robert (Montrose)
Smith, Ben (Bermondsey, Rotherhithe)


Brown, Ernest (Leith)
John, William (Rhondda, West)
Smith, H. B. Lees (Keighley)


Brown, James (Ayr and Bute)
Jones, Henry Haydn (Merioneth)
Smith, Rennie (Penistone)


Buchanan, G.
Jones, Morgan (Caerphilly)
Snell, Harry


Buxton, Rt. Hon. Noel
Jones, T. I. Mardy (Pontypridd)
Snowden, Rt. Hon. Philip


Cape, Thomas
Kelly, W. T,
Stamford, T. W.


Cluse, W. S.
Kennedy, T.
Stewart, J. (St. Rollox)


Clynes, Rt. Hon. John R.
Lansbury, George
Sullivan, J.


Compton, Joseph
Lawrence, Susan
Sutton, J. E.


Connolly, M.
Lawson, John James
Taylor, R. A.


Cove, W. G.
Lee, F.
Thorne, W. (West Ham, plaistow)


Cowan, D. M. (Scottish Universities)
Lindley, F. W.
Townend, A. E.


Crawfurd, H. E.
Lowth, T.
Trevelyan, Rt. Hon. C. P.


Dalton, Hugh
Lunn, William
Varley, Frank B.


Davies, Ellis (Denbigh, Denbigh)
Macdonald, Sir Murdoch (Inverness)
Viant, S. P.


Davies, Evan (Ebbw Vale)
Mackinder, W.
Wallhead, Richard C.


Davies, Rhys John (Westhoughton)
MacLaren, Andrew
Walsh, Rt. Hon. Stephen


Day, Colonel Harry
Maclean, Neil (Glasgow, Govan)
Watson, W. M. (Dunfermllne)


Dennison, R.
Maxton, James
Westwood, J.


Duncan, C.
Mosley, Oswald
Whiteley, W.


Dunnico, H.
Murnin, H.
Wiggins, William Martin


Edge, Sir William
Naylor, T. E.
Wilkinson, Ellen C.


England, Colonel A.
Newman, Sir R. H. S. D. L. (Exeter)
Williams, Dr. J. H. (Lianelly)


Forrest, W.
Oliver, George Harold
Williams, T. (York, Don Valley)


Gardner, J. P.
Paling, W.
Wilson, C. H. (Sheffield, Attercliffe)


Gillett, George M.
Parkinson, John Allen (Wigan)



Graham, Rt. Hon. Wm. (Edin., Cent.)
Pethick-Lawrence, F. W.
TELLERS FOR THE NOES.—


Greenall, T.
Ponsonby, Arthur
Mr. Charles Edwards and Mr. A.


Greenwood, A. (Nelson and Colne)
Potts, John S.
Barnes.

CLAUSE 12.—(Rebate of duty in case of licence taken out for certain motor vehicles in 1927.)

The MINISTER of TRANSPORT (Colonel Ashley): I beg to move, in page 6, line 16, after the word "was," to insert the words:
(within the meaning of the said paragraph (5) as that paragraph will have effect on and after the first day of January, nineteen hundred and twenty-eight).

The Amendment is quite simple. It seeks to enact that agricultural purposes, as defined in Clause 12, shall be the same as in paragraph (c) of the Fourth Schedule. The House is aware that the Fourth Schedule only comes into operation on 1st January next, and also that certain concessions were given during the Committee stage to agriculturists in regard to the duty which they will have to pay on their vehicles. Later in the proceedings on this Bill I propose to move an Amendment to meet the case of the agriculturist who carries a small parcel of agricultural goods on his lorry for another agriculturist, so as to prevent him from losing the benefit of the concession simply because he has done a good turn in this way, without any payment and merely as a gracious act. If that subsequent Amendment be made, this Amendment will ensure that in this year 1927 the farmer shall not be prevented from getting the concession because he has carried, on some occasion, a small parcel.

Amendment agreed to.

Further Amendment made: In page 6, line 19, leave out the words "and for no other purpose."—[Colonel Ashley.]

CLAUSE 19.—(Wrapping paper—exemption when used as new material for yarn.)

Mr. A. R. KENNEDY: I beg to move, in page 9, line 9, to leave out the words "is imported after the date of the passing of this Act," and to insert instead thereof the words
has been since the twenty-fifth day of April, nineteen hundred and twenty-seven, or is hereafter imported.
This Amendment, like the last one, is very simple and modest. In Clause 19 a provision was made in the Committee stage which would have the effect of exempting from the paper duties imposed
by the Finance Act of last year, paper of a special character, made only in two factories in the world, imported into this country and spun into yarn by one or two small industries. The provision itself was very useful and, as the representative of a constituency which contains one of these industries, I welcomed it. My anxiety now is that the benefit of that exemption should be given as from a date which I have stated in the Amendment as 25th April, 1927. I think, having regard to the fact that the duty imposed on paper has such a serious effect on these industries, and that it was not intended to have that effect, I might reasonably have asked that the amount of duty which has been paid by these industries since the passing of the Act last year should be refunded to the firms concerned. I am contenting myself, however, with asking that there should be an Amendment of the kind I now propose, so that paper coming forward, as well as paper which has arrived in this country since 25th April of this year, shall be, so far as it is consigned to these particular businesses, for their particular purposes, be exempt from the duty.

Mr. GERALD HURST: I beg to Second the Amendment.
I do so because the Amendment proposes to lessen, so far as any Amendment can lessen, the disastrous effects of the decision which was come to last year to extend the principle of safeguarding to the raw materials of industries. It is impossible to exaggerate the ill-effects of this duty on the textilose industry in Lancashire. When this matter was debated a year ago, a large number of Conservative Members from Lancashire pointed out the danger of taxing raw materials. The result of the duty has been that, whereas a year ago this was a flourishing industry, making yarns by means of paper, and furnishing the raw material for the carpet indistry, now, owing to the imposition of this duty, these works at Trafford Park have been practically closed down and hundreds of people have been dismissed, while foreign carpets, fully manufactured, have come in free of duty. The imposition of a duty on the raw material has left the British industry absolutely stranded. All we can do now is to lessen the injury so far as that can be done by legislation.
Clause 19 is not perfect, but it tries to meet the case of the textilose industry, and the Amendment is an attempt to lessen the harm and to enable this industry to recover from the effects of hasty and ill-considered legislation.

Sir P. CUNLIFFE-LISTER: The Mover and Seconder of the Amendment have given a not altogether accurate account of the effects of this duty which has greatly increased employment in this country. There is one exceptional case, and the Government on the last occasion when an Amendment was moved accepted that Amendment exactly in the form in which it was moved. On that occasion, no voice was raised in criticism of that Amendment. Now hon. Members are asking for something more, something entirely inconsistent with the practice of the Customs, and something which was not put forward by the supporters of the Amendment moved on the last occasion. It would be quite impracticable, so the Customs inform me, to take the Amendment in this form. They would have to be satisfied that the paper which is, in fact, already imported for these factories had found its way into the factories. They would have to be satisfied as to the destination and use of each consignment. Because of the particular circumstances of this case, and the fact that the paper is of a unique class, they have made this exception, but it would be impossible for them to check the consignments which have already been introduced into this country. Therefore, I cannot accept the Amendment.

Mr. HARRIS: I think the President of the Board of Trade is most unreasonable in this case, as he always is. The only time when we meet with any sympathy in these matters is when he leaves us to the tender mercies of the Parliamentary Secretary who, at least, has courtesy and is ready to listen to argument and reason. The right hon. Gentleman thinks it is his business to rule this House in the manner of an autocrat. Here we have a case of an industry which has been nearly ruined by this so-called "safeguarding" of industry. This industry was apparently doing a good home trade and also a good export trade, though the right hon. Gentleman seems to despise export trade. I happen to know a very enterprising firm which was investing capital in a new enterprise, but the right hon. Gentleman's ingenuity found a way of closing down the works for a whole year. Now this reasonable proposal is put forward by the Member for the district, that some of the harm that has been done should be undone, but the right hon. Gentleman says that it would be inconvenient to the Customs officials. The Customs officials have been multiplied exceedingly, and kept busy, and now, forsooth, because of the inconvenience to these officials, the right hon. Gentleman cannot accept this Amendment.

Question put, "That the words proposed to be left out stand part of the Bill."

The House divided: Ayes. 249: Noes, 120.

Division No. 271.]
AYES.
[9.58 p.m.


Acland Troyte, Lieut.-Colonel
Brittain, Sir Harry
Conway, Sir W. Martin


Albery, Irving James
Brocklebank, C. E. R
Cope, Major William


Alexander, E. E. (Leyton)
Broun-Lindsay, Major H.
Couper, J. B.


Alexander, Sir Wm. (Glasgow, Cent'l)
Brown, Col. D. C. (N'th'l'd., Hexham)
Courtauld, Major J. S.


Allen, Lieut.-Col. Sir William James
Brown, Brig.-Gen. H. C. (Berks, Newb'y)
Courthope, Colonel Sir G. L.


Ashley, Lt.-Col. Rt. Hon. Wilfrid W.
Buchan, John
Cowan, Sir Wm. Henry (Islingtn., N.)


Baldwin, Rt. Hon. Stanley
Buckingham, Sir H.
Craig, Capt. Rt. Hon. C. C. (Antrim)


Balfour, George (Hampstead)
Burney, Lieut.-Com. Charles D.
Craig, Sir Ernest (Chester, Crewe)


Balniel, Lord
Butler, Sir Geoffrey
Crooke, J. Smediey (Deritend)


Banks, Reginald Mitchell
Butt, Sir Alfred
Crookshank, Col. C. de W. (Berwick)


Barclay-Harvey, C. M.
Cadogan, Major Hon. Edward
Crookshank, Col. H.(Lindsey, Gainsbro)


Barnett, Major Sir Richard
Campbell, E. T.
Cunliffe, Sir Herbert


Beamish, Rear-Admiral T. P. H.
Carver, Major W. H.
Dalkeith, Earl of


Bellairs, Commander Carlyon W.
Cassels, J. D.
Davidson, J.(Hertf'd, Hemel Hempst'd)


Bennett, A. J.
Cayzer, Sir C. (Chester, City)
Davies, Maj. Geo. F. (Somerset, Yeovil)


Betterton, Henry B.
Cecil, Rt. Hon. Sir Evelyn (Aston)
Davies, Dr. Vernon


Bird, E. R. (Yorks, W. R., Skipton)
Chadwick, Sir Robert Burton
Davison, Sir W. H. (Kensington, S.)


Boothby, R. J. G.
Churchill, Rt. Hon. Winston Spencer
Dawson, Sir Philip


Bourns, Captain Robert Croft
Churchman, Sir Arthur C.
Dean, Arthur Wellesley


Bowyer, Capt. G. E. W.
Clarry, Reginald George
Dixey, A. C.


Brass, Captain W.
Cobb, Sir Cyril
Drewe, C.


Brassey, Sir Leonard
Cochrane, Commander Hon. A. D.
Eden, Captain Anthony


Briggs, J. Harold
Cockerill, Brig,-General Sir George
Edmondson, Major A. J.


Elliot, Major Walter E.
Jackson, Sir H. (Wandsworth, Cen'l)
Reid, D. D. (County Down)


Ellis, R. G.
James, Lieut.-Colonel Hon. Cuthbert
Remer, J. R.


Elveden, Viscount
Jones, G. W. H. (Stoke Newington)
Rice, Sir Frederick


Evans, Captain A. (Cardiff, South)
King, Commodore Henry Douglas
Richardson, Sir P. W. (Sur'y, Ch'ts'y)


Everard, W. Lindsay
Kinloch-Cooke, Sir Clement
Roberts, E. H. G. (Flint)


Fairfax, Captain J. G.
Knox, Sir Alfred
Roberts Sir Samuel (Hereford)


Falle, Sir Bertram G.
Lamb, J. Q.
Ropner, Major L.


Fermoy, Lord
Lister, Cuniffe-. Rt. Hon. Sir Philip
Russell, Alexander West (Tynemouth)


Fielden, E. B.
Lloyd, Cyril E. (Dudley)
Rye, F. G.


Finburgh, S.
Loder, J. de V.
Samuel, Samuel (W'dsworth, Putney)


Forestier-Walker, Sir L.
Long, Major Eric
Sandeman, N. Stewart


Foster, Sir Harry S.
Looker, Herbert William
Sanders, Sir Robert A.


Foxcroft, Captain C. T.
Lougher, Lewis
Shaw, R. G. (Yorks, W.R., Sowerby)


Fraser, Captain Ian
Lucas-Tooth, Sir Hugh Vere
Sheffield, Sir Berkeley


Fremantle, Lieut.-Colonel Francis E.
Lumley, L. R.
Shepperson, E. W.


Galbraith, J. F. W.
Macdonald, Capt. P. D. (I. of W.)
Simms, Dr. John M. (Co. Down)


Ganzoni, Sir John
Macdonald, R. (Glasgow, Cathcart)
Smith-Carington, Neville W.


Gault, Lieut.-Col. Andrew Hamilton
McDonnell, Colonel Hon. Angus
Spender-Clay, Colonel H.


Gibbs, Col. Rt. Hon. George Abraham
Maclntyre, Ian
Sprot, Sir Alexander


Goff, Sir Park
McLean, Major A.
Stanley, Lieut.-Colonel Rt. Hon. G. F.


Grace, John
Macmillian, Captain H.
Stanley, Hon. O. F. G. (Westm'eland)


Graham, Fergus (Cumberland, N.)
McNeill, Rt. Hon. Ronald John
Steel, Major Samuel Strang


Grant, Sir J. A.
Macquisten, F. A.
Storry-Deans, R.


Grattan-Doyle, Sir N.
MacRobert, Alexander M.
Streatfeild, Captain S. R.


Greaves-Lord, Sir Walter
Maitland, Sir Arthur D. Steel-
Stuart, Crichton-. Lord C.


Greene, W. P. Crawford
Makins, Brigadier-General E.
Stuart, Hon. J. (Moray and Nairn)


Grenfell, Edward C. (City of London)
Malone, Major P. B.
Styles, Captain H. Walter


Grotrian, H. Brent
Manningham-Buller, Sir Mervyn
Sueter, Rear-Admiral Murray Fraser


Guest, Capt. Rt. Hon. F. E. (Bristol, N.)
Marriott, Sir J. A. R.
Tasker, R. Inigo.


Gunston, Captain D. W.
Mason, Lieut-Col. Glyn K.
Templeton, W. P.


Hacking, Captain Douglas H.
Meller, R. J.
Thompson, Luke (Sunderland)


Hall, Lieut.-Col. Sir F. (Dulwich)
Merriman, F. B.
Thomson, F. C. (Aberdeen, South)


Hall, Capt. W. D'A. (Brecon & Rad.)
Meyer, Sir Frank
Thomson, Rt. Hon. Sir W. Mitchell-


Hanbury, C.
Milne, J. S. Wardlaw-
Tryon, Rt. Hon. George Clement


Hannon, Patrick Joseph Henry
Mitchell, W. Foot (Saffron Walden)
Vaughan-Morgan, Col. K. P.


Harland, A.
Mitchell, Sir W. Lane (Streatham)
Ward. Lt.-Col. A.L.(Kingston-on-Hull)


Harmsworth, Hon. E. C. (Kent)
Mond, Rt. Hon. Sir Alfred
Warrender, Sir Victor


Harrison, G. J. C.
Monsell, Eyres, Com. Rt. Hon. B. M.
Waterhouse, Captain Charles


Hartington, Marquess of
Moore, Lieut-Colonel T. C. R. (Ayr)
Watson, Rt. Hon. W. (Carlisle)


Harvey, G. (Lambeth, Kennington)
Moreing, Captain A. H.
Wells, S. R.


Hawke, John Anthony
Nall, Colonel Sir Joseph
Wheler, Major Sir Granville C. H.


Headlam, Lieut-Colonel C. M.
Nelson, Sir Frank
White, Lieut.-Col. Sir G. Dalrymple


Henderson, Capt. R. R. (Oxf'd, Henley)
Neville, Sir Reginald J.
Williams, A. M. (Cornwall, Northern)


Heneage, Lieut.-Colonel Arthur P.
Newton, Sir D. G. C. (Cambridge)
Williams, Com. C. (Devon, Torquay)


Henn, Sir Sydney H.
Nuttall, Ellis
Williams, Herbert G. (Reading)


Herbert, Dennis (Hertford, Watford)
Oakley, T.
Wilson, Sir C. H. (Leeds, Central)


Hills, Major John Waller
O'Connor, T. J. (Bedford, Luton)
Wilson, R. R. (Stafford, Lichfield)


Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.
O'Neill, Major Rt. Hon. Hugh
Winby, Colonel L. P.


Hogg, Rt. Hon. Sir D.(St. Marylebone)
Oman, Sir Charles William C.
Wise, Sir Fredric


Holt, Captain H. P.
Ormsby-Gore, Rt. Hon. William
Withers, John James


Hope, Sir Harry (Forfar)
Penny, Frederick George
Wolmer, Viscount


Hopkins, J. W. W.
Perkins, Colonel E. K.
Womersley, W. J.


Horlick, Lieut.-Colonel J. N.
Perring, William George
Wood, E. (Chest'r, Stalyb'dge & Hyde)


Hudson, Capt. A. U. M.(Hackney, N.)
Peto, Sir Basil E. (Devon, Barnstaple)
Wood, Sir Kingsley (Woolwich W.)


Hudson, R. S. (Cumberl'nd, Whlteh'n)
Peto, G. (Somerset, Frome)
Wood, Sir S. Hill- (High Peak)


Hume, Sir G. H.
Pilditch, Sir Philip
Woodcock, Colonel H. C.


Hume-Williams, Sir W. Ellis
Pownall, Sir Assheton
Worthington-Evans, Rt. Hon. Sir L.


Hunter-Weston, Lt.-Gen. Sir Aylmer
Price, Major C. W. M.
Young, Rt. Hon. Sir Hilton (Norwich)


Huntingfield, Lord
Radford, E. A.



Hurd, Percy A.
Raine, Sir Walter
TELLERS FOR THE AYES.—


Inskip, Sir Thomas Walker H.
Rawson, Sir Cooper
Captain Viscount Curzon and




Captain Margesson.


NOES.


Adamson, Rt. Hon. W. (Fife, West)
Clynes, Rt. Hon. John R.
Greenall, T.


Adamson, W. M. (Staff., Cannock)
Compton, Joseph
Greenwood, A. (Nelson and Colne)


Ammon, Charles George
Connolly, M.
Grenfell, D. R. (Glamorgan)


Attlee, clement Richard
Cove, W. G.
Groves, T.


Baker, J. (Wolverhampton, Bilston)
Cowan, D. M. (Scottish Universities)
Grundy, T. W.


Baker, Walter
Crawfurd, H. E.
Hall, F. (York, W.R., Normanton)


Barker, G. (Monmouth, Abertillery)
Dalton, Hugh
Hall, G. H. (Merthyr Tydvil)


Batey, Joseph
Davies, Evan (Ebbw Vale)
Hamilton, Sir R. (Orkney & Shetland)


Bondfield, Margaret
Davies, Rhys John (Westhoughton)
Hardie, George D.


Bowerman, Rt. Hon. Charles W.
Day, Colonel Harry
Harney, E. A.


Briant, Frank
Dennison, R.
Harris, Percy A.


Broad, F, A.
Duncan, C.
Hartshorn, Rt. Hon. Vernon


Bromley, J.
Dunnico, H.
Henderson, Rt. Hon. A. (Burnley)


Brown, Ernest (Leith)
Edge, Sir William
Henderson, T. (Glasgow)


Brown, James (Ayr and Bute)
Edwards, C. (Monmouth, Bedwellty)
Hirst, G. H.


Buchanan, G.
England, Colonel A.
Hirst, W. (Bradford, South)


Buxton, Rt. Hon. Noel
Forrest, W.
Hurst, Gerald B.


Cape, Thomas
Gillett, George M
Hutchison, Sir Robert (Montrose)


Cluse, W. S.
Graham, Rt. Hon. Wm. (Edin.,Cent.)
John, William (Rhondda, West)




Jones, Henry Haydn (Merioneth)
Paling, W.
Stamford, T. W.


Jones, Morgan (Caerphilly)
Parkinson, John Allen (Wigan)
Stewart, J. (St. Rollox)


Jones, T. I. Mardy (Ponlypridd)
Pethick-Lawrence, F. W.
Sullivan, J.


Kelly, W. T.
Ponsonoy, Arthur
Sutton, J. E.


Kennedy, A. R. (Preston)
Potts, John S.
Taylor, R. A.


Kennedy, T.
Purcell, A. A.
Thorne, W. (West Ham, Plalstow)


Lawrence, Susan
Richardson, R. (Houghton-le-Spring)
Townend, A. E.


Lawson, John James
Rlley, Ben
Trevelyan, Ht. Hon. C. P.


Lee, F.
Ritson, J.
Varley, Frank B.


Lindley, F. W.
Robinson, W. C. (Yorks. W.R., Elland)
Viant, S. P.


Lowth, T.
Runclman, Rt. Hon. Walter
Wallhead, Richard C.


Lunn, William
Salter, Dr. Alfred
Walsh, Rt. Hon. Stephen


Macdonald, Sir Murdoch (Inverness)
Scurr, John
Watson, W. M. (Ounfermllne)


Mackinder, W.
Shepherd, Arthur Lewis
Westwood, J.


MacLaren, Andrew
Simon, Rt. Hon. Sir John
Wiggins, William Martin


Maclean, Nell (Glasgow, Govan)
Sinclair, Major Sir A. (Caithness)
Wilkinson, Ellen C.


Maxton, James
Sitch, Charles H.
Williams, Dr. J. H. (Llanelly)


Mosley, Oswald
Smillie, Robert
Williams, T. (York, Don Valley)


Murnin, H.
Smith, Ben (Bermondsey, Rotherhithe)
Wilson, C. H. (Sheffield, Attercliffe)


Naylor, T. E.
Smith, H. B. Lees- (Keighley)



Newman, Sir H. H. S. D. L. (Exeter)
Smith, Rennie (Penistone)
TELLERS FOR THE NOES.—


Oliver, George Harold
Snowden, Bt. Hon. Philip
Mr. A. Barnes and Mr. Whiteley.

Mr. HARRIS: I beg to move, in page 9, in line 11, after the word "yard," to insert the words, "or to be used in some other process of manufacture."
The process of the education of the right hon. Gentleman the Minister in charge of these duties, the President of the Board of Trade, is going on. He has had one, little lesson, so simple that he can understand it. Even he cannot explain it away by elaborate arguments. Bat there are other industries, older industries, better established and better organised, that have been able to withstand the handicap of these duties on their raw material, because wrapping-paper is a raw material. It is a material largely used in thousands of the great industries of this country. I am not going to give the case of the confectionery trade, because when the duty was originally introduced it was argued at length and no adequate answer was given to those arguments. Thousands of men are working in the confectionery industry, and this paper is an important ingredient of that industry. But there is another case where the argument is even stronger, as has been proved during the last few months in which we have had experience of this duty, and that is the manilla envelope industry. The manufacture of envelopes is a very big trade. A large amount of correspondence is going on all over the world, and envelopes have to be used for this correspondence.
It has been pointed out in evidence before the Committee of Inquiry that, compared with the number of people employed in manufacturing wrapping-paper, the number of people employed in the
manufacture of envelopes is three, four or five times the number. The more experience we have of the incidence of this new duty on the envelope industry, the more serious does it become. We have a case quoted in the "Board of Trade Journal," page 722, with reference to the trade in India. In India, largely due to the spread of education, the development of the envelope trade has been considerable during the last few years. Great Britain, before the imposition of this duty, was getting a considerable share, but already, as figures show, while there has been an increase in the importation of envelopes in India, the share of Great Britain has fallen, while the importations from Norway, Germany and Holland have increased. That is undoubtedly attributable entirely to the fact that their raw material is taxed under the wrapping-paper duty. It is true it may be argued that it is quite possible to get the drawback, but somehow or other the Customs House officials find it impossible so to arrange matters that a drawback can be given, and the result is that this very important industry, employing many thousands of people is handicapped and displaced.
Nor is the actual wrapping-paper industry largely benefited by the duty. I notice that, in the first six months of 1927, the, latest available figures, there was a decrease in re-exports as compared with last year. The re-exports of wrapping-paper amounted to £33,000 in 1926. The industry then was handicapped by the coal stoppage, but they have fallen to £10,000 in 1927, so that even the industry itself is not receiving much benefits by the duty. The exports have gone down from £205,000 to £156,000, so that
you have both exports and re-exports' going down in value. Therefore, not only is the industry in this country handicapped by a tax on raw material, but the wrapping-paper industry itself in this country is apparently not receiving much benefit from this duty, in the light of these figures. There is, at any rate, one industry to which this duty has proved of no benefit, and, therefore, is it unreasonable to ask that the same privilege should be extended to all the industries where wrapping-paper is actually the raw material? I contend that is a concession for which we are entitled to ask, and I hope the Minister will for once be reasonable, and will make some concession.

Mr. RADFORD: I beg to second the Amendment.
I find myself in rather an unusual position in supporting an Amendment of this kind, moved by the hon. Gentleman the Member for South-West Bethnal Green (Mr. Harris), but I do so differing entirely from him and from the arguments which he has used. I understood him to say—I hope I am not misquoting him—that this particular wrapping-paper is one of the ingredients used in confectionery manufacture. [Interruption.] If that fact were substantiated, then the consumption of British-made confectionery would go down. I want to refer, however, to some other directions in which the import duty on wrapping-paper has operated as a tax on raw material in certain of our industries. I think it is universally accepted in all parts of the House that the Government's policy of safeguarding, taken as a whole, has been an unqualified success. [Interruption.] Hon. Members opposite appear to dissent from that view, but I think I may say that, whereas we recognise that on this side of the House, with whole-hearted satisfaction, they admit it in secret and reluctantly. But we, on this side of the House, are not doctrinaires, and where we find that any of these import duties operate in a manner in which it was not intended they should operate, we are prepared to make some amendment to the provisions of our law accordingly.
I think I am right in saying that the introduction of these import duties was to stimulate our home manufactures, and we believe that if our English manufacturers are thereby able to obtain a greater output from their works, and thereby cut down their cost of production, then the British article will cost no more to the consumer than when, the foreign stuff was coming in free. But there are certain classes of wrapping paper which it has been found cannot be made by English manufacturers. There is kraft wrapping paper, which is made of wood pulp, and to secure the best quality the wood pulp must be manufactured into paper while it is wet and fresh. Our English manufacturers who use the highest quality kraft papers are still compelled to buy kraft papers from abroad. There are only two mills, one in Canada and one in Sweden, which make the particular quality which was referred to in the previous Amendment as paper which was imported to be spun into textilose yarn. That same paper is also used for the manufacture of certain packing materials. It is used to make kraft waterproof paper, nutbrown waterproof paper, cottonline waterproof paper, and various other varieties of paper for which it is a raw material, and our manufacturers have to import it from abroad.
Another anomaly in connection with this duty is that it is very uncertain what constitutes a wrapping paper and what does not. Some friends of mine assure me that they have definite evidence that because they are packing material manufacturers all the paper sent to them is regarded as packing paper and they have to pay import duty on it—they themselves do certain printing on those wrapping papers before they become the finished article. On the other hand, firms of printers who import identical paper find that it is regarded a printing paper in their case because they are printers, and that it comes in free of duty. I am sure those anomalies will be dealt with by my right hon. Friend as a matter of departmental regulation; but I do submit that it was never intended that when it was found that a duty was operating in a way in which it was not designed to operate that we should continue that duty. Hon. Members opposite have always said that once an import duty is imposed it is imposed for ever, because we cannot experiment with these
duties. I appeal to my right hon. Friend the President of the Board of Trade to show them they have been entirely wrong in that contention, and that where we find an isolated case amongst the whole of our safeguarding duties which has not been an unqualified success we are prepared to make the necessary amendment.

Sir P. CUNLIFFE-LISTER: The effect of the wrapping paper duty upon the industry as a whole has undoubtedly been wholly beneficial. Not only have men been kept in work who would have been thrown out of work if the Opposition had had their way, but, in addition to that, large orders have been placed for new machinery for re-equipping English mills, exactly as was forecast a year ago. Not only have these orders been placed for machinery, but in spite of various factors which, I am informed, would make naturally for an increase in price—some of the materials had risen in price—the English quotation for kraft paper has gone down by several pounds per ton since the duty was imposed. I think that is enough to dispose of the general argument that this duty has had an adverse effect. We have made an exception in the one case where it was proved that a particular kind of kraft paper was absolutely indispensable for a particular kind of manufacture. There are many cases in which one or another of the forms of kraft paper can be used indiscriminately, and in which the English paper can quite well be used in place of the foreign paper. It was to meet one unique case where a particular article can only be manufactured with one particular kind of foreign kraft, obtainable from a single factory, that the special exemption to which the Customs have agreed has been inserted in the Bill.
The question of envelopes has been raised. There is not the least doubt that envelopes can be made just as well from English paper as from foreign paper. Though people come forward, as it is quite right they should, to report to the Board of Trade any difficulties in their trade, I am informed that not a single envelope manufacturer has made the least complaint to the Board of Trade during the whole time the duty has been in operation. This is a matter which engaged the attention of the Committee which re-
ported in the first instance. They contemplated that a drawback could not be given, and said that they made their recommendation on the assumption that a drawback would not be given. They gave it as their considered judgment that an advantage would accrue in employment by putting on this duty, and I think that has been borne out by the result. Moreover, when the duty was imposed, this House was careful to put it only upon articles made almost wholly of paper, and a provision was inserted in the Finance Act of last year dealing with this point. It would therefore be unwise to repeal the duty, thus making wrapping paper used in this country duty free. That would be quite impossible of administration.
This duty was agreed to a year ago. I need not repeat all the arguments which were then so plainly stated by the Financial Secretary to the Treasury, who used the argument as to the impossibility of levying or not levying a duty in accordance with the ultimate purpose of the imported article. Suffice it to say that in order to carry out this duty it would be necessary for the Customs to establish some system of inspection of all imported paper from start to finish and all the processes through which that paper passed. I do not think anything more objectionable to paper manufacturers could be invented, and I am certain it would not work if put into operation. On the ground that this Amendment is administratively impossible, economically unnecessary, and that it would repeal a duty that has been very effective I invite the House to reject it.

Mr. H. WILLIAMS: The hon. Member for South-West Bethnal Green (Mr. Harris) horrified us by his statement about the effect this duty would have upon the envelope trade. May I point out that in the first six months of last year, before the passing of this duty, our exports for envelopes amounted to 22,828 cwts. This year during a similar period, while this duty has been in operation, the total was 24,472 cwts. Therefore, the arguments of the hon. Member for South-West Bethnal Green are destroyed by the actual facts.

Mr. HARRIS: The hon. Member is including envelopes made not only from kraft but from all paper.

Question put, "That those words be there inserted in the Bill."

The House divided Ayes, 129; Noes, 252.

Division No. 272.]
AYES.
[10.20 p.m.


Adamson, Rt. Hon. W. (Fife, West)
Groves, T.
Rees, Sir Beddoe


Adamson, W. M. (Staff., Cannock)
Grundy, T. W.
Richardson, R. (Houghton-le-Spring)


Alexander, A. V. (Sheffield, Hillsbro')
Hall, F. (York, W. R., Normanton)
Riley, Ben


Ammon, Charles George
Hall, G. H. (Merthyr Tydvil)
Ritson, J.


Attlee, Clement Richard
Hamilton, Sir R. (Orkney & Shetland)
Robinson, W. C. (Yorks, W.R., Elland)


Baker, J. (Wolverhampton, Bilston)
Hardie, George D.
Runciman, Rt. Hon. Walter


Baker, Walter
Harris, Percy A.
Salter, Dr. Alfred


Barker, G. (Monmouth, Abertillery)
Hartshorn, Rt. Hon. Vernon
Scurr, John


Barnes, A.
Henderson, Right Hon. A. (Burnley)
Shaw, Rt. Hon. Thomas (Preston)


Batey, Joseph
Henderson, T. (Glasgow)
Shepherd, Arthur Lewis


Beckett, John (Gateshead)
Hirst, G. H.
Simon, Rt. Hon. Sir John


Bowerman, Rt. Hon. Charles W.
Hirst, W. (Bradford, South)
Sitch, Charles H.


Briant, Frank
Hurst, Gerald B.
Smillie, Robert


Broad, F. A.
John, William (Rhondda, West)
Smith, Ben (Bermondsey, Rotherhithe)


Bromfield, William
Jones, Henry Haydn (Merioneth)
Smith, H. B. Lees- (Keighley)


Bromley, J.
Jones, Morgan (Caerphilly)
Smith, Rennie (Penistone)


Brown, Ernest (Leith)
Jones, T. I. Mardy (Pontypridd)
Snell, Harry


Brown, James (Ayr and Bute)
Kelly, W. T.
Snowden, Rt. Hon. Philip


Buchanan, G.
Kennedy, A. R. (Preston)
Stamford, T. W.


Buxton, Rt. Hon. Noel
Kennedy, T.
Stewart, J. (St. Rollox)


Cape, Thomas
Lansbury, George
Strauss, E. A.


Cluse, W. S.
Lawrence, Susan
Sullivan, Joseph


Compton, Joseph
Lawson, John James
Sutton, J. E.


Connolly, M.
Lee, F.
Taylor, R. A.


Cove, W. G.
Lindley, F. W.
Thorne, W. (West Ham, Plaistow)


Cowan, D. M. (Scottish Universities)
Lowth, T.
Townend, A. E.


Crawfurd, H. E.
Lunn, William
Trevelyan, Rt. Hon. C. P.


Dalton, Hugh
Macdonald, Sir Murdoch (Inverness)
Varley, Frank B.


Davies, Evan (Ebbw Vale)
Mackinder, W.
Viant, S. P.


Davies, Rhys John (Westhoughton)
MacLaren, Andrew
Wallhead, Richard C.


Day, Colonel Harry
Maclean, Nell (Glasgow, Govan)
Walsh, Rt. Hon. Stephen


Dennison, R.
March, S.
Watson, W. M. (Dunfermilne)


Duncan, C.
Maxton, James
Watts-Morgan, Lt.-Col. D. (Rhondda)


Dunnico, H.
Mosley, Oswald
Westwood, J.


Edge, sir William
Murnin, H.
Whiteley, W.


Edwards, C. (Monmouth, Bedwellty)
Naylor, T. E.
Wiggins, William Martin


England, Colonel A.
Oliver, George Harold
Wilkinson, Ellen C.


Forrest, W.
Palin, John Henry
Williams, David (Swansea, E)


Gardner, J. P.
Paling, W.
Williams, Dr. J. H. (Lianelly)


Gillett, George M.
Parkinson, John Allen (Wigan)
Williams, T. (York, Don Valley)


Graham, Rt. Hon-Wm. (Edin., Cent.)
Pethick-Lawrence, F. W.
Wilson, C. H. (Sheffield Attercliffe)


Greenall, T.
Ponsonby, Arthur



Greenwood, A. (Nelson and Colne)
Potts, John S.
TELLERS FOR THE AYES.—


Grenfell, D. R. (Glamorgan)
Purceil, A. A.
Sir Robert Hutchison and Mr.




Fenby.


NOES.


Acland-Troyte, Lieut.-Colonel
Burney, Lieut.-Com. Charles D.
Cunliffe, Sir Herbert


Agg-Gardner, Rt. Hon. Sir James T.
Butler, Sir Geoffrey
Dalkeith, Earl of


Albert, Irving James
Butt, Sir Alfred
Davidson, J. (Hertf'd,Hemel Hempst'd)


Alexander, E. E. (Leyton)
Cadogan, Major Hon. Edward
Davies, Maj. Geo. F. (Somerset, Yeovil)


Alexander, Sir Wm. (Glasgow, Cent'l)
Calne, Gordon Hall
Davies, Dr. Vernon


Allen, Lieut.-Col. Sir William James
Campbell, E. T.
Davison, Sir W. H. (Kensington, S.)


Ashley, Lt.-Col. Rt. Hon. Wilfrid W.
Carver, Major W. H.
Dawson, Sir Philip


Baldwin, Rt. Hon. Stanley
Cassels, J. D.
Dean, Arthur Wellesley


Balfour, George (Hampstead)
Cayzer, Sir C. (Chester, City)
Dixey, A. C,


Balniel, Lord
Cecil, Rt. Hon. Sir Evelyn (Aston)
Drewe, C.


Banks, Reginald Mitchell
Chadwick, Sir Robert Burton
Eden, Captain Anthony


Barclay-Harvey C. M.
Churchill, Rt. Hon. Winston Spencer
Edmondson, Major A. J.


Barnett, Major Sir Richard
Churchman, Sir Arthur C.
Elliot, Major Walter E.


Beamish, Rear-Admiral T. P. H.
Clarry, Reginald George
Ellis, R. G.


Billairs, Commander Carlyon W.
Cobb, Sir Cyril
Elveden, Viscount


Bennett, A. J.
Cochrane, Commander Hon. A. D.
Evans, Captain A. (Cardiff, South)


Betterton, Henry B.
Cockerill, Brig.-General Sir George
Everard, W. Lindsay


Bird, E. R. (Yorks, W. R., Skipton)
Conway, Sir W. Martin
Fairfax. Captain J. G.


Boothby, R. J. G.
Cooper, A. Duff
Falle, Sir Bertram G.


Bourne, Captain Robert Croft
Cope, Major William
Fermoy, Lord


Bowyer, Capt. G. E. W.
Couper, J. B.
Fielden, E. B.


Brassey, Sir Leonard
Courtauld, Major J. S.
Finburgh, S.


Briggs, J. Harold
Courthope, Colonel Sir G. L.
Forester-Walker, Sir L.


Brittain, Sir Harry
Cowan, Sir Wm. Henry (Islington,N.)
Foster, Sir Harry S.


Brocklebank, C. E. R.
Craig, Capt. Rt. Hon. C. C. (Antrim)
Foxcroft, Captain C. T.


Broun-Lindsay, Major H.
Craig, Sir Ernest (Chester, Crewe)
Fraser, Captain Ian


Brown, Brig.-Gen. H. C. (Berks,Newb'y)
Crooke, J. Smedley (Deritend)
Fremantie, Lieut.-Colonel Francis E.


Buchan, John
Crookshank, Col. C. de W. (Berwick)
Ganzonl, Sir John


Buckingham, Sir H.
Crookshank, Cpt. H. (Lindsey, Gainsbro)
Gault, Lieut.-Col. Andrew Hamilton


Gibbs, Col. Rt. Hon. George Abraham
Lucas-Tooth, Sir Hugh Vere
Rye, F. G.


Goff, Sir Park
Lumley, L. R.
Salmon, Major I.


Graham, Fergus (Cumberland, N.)
Macdonald, Capt. P. D. (I. of W.)
Samuel, Samuel (W'dsworth, Putney)


Grant, Sir J. A.
Macdonald, R. (Glasgow, Catheart)
Sandeman, N. Stewart


Grattan-Doyle, Sir N.
McDonnell, Colonel Hon. Angus
Sanders, Sir Robert A.


Greaves-Lord, Sir Walter
Macintyre, Ian
Sassoon, Sir Philip Albert Gustave D.


Greene, W. P. Crawford
McLean, Major A.
Shaw, R. G. (Yorks, W. R., Sowerby)


Grenfell, Edward C. (City of London)
Macmillan, Captain H.
Sheffield, Sir Berkeley


Grotrian, H. Brent
Macnaghten, Hon. Sir Malcolm
Shepperson, E. W.


Guest, Capt. Rt, Hon. F. E. (Bristol, N)
McNeill, Rt. Hon. Ronald John
Simms, Dr. John M. (Co. Down)


Gunston, Captain D. W.
Macquisten, F. A.
Skelton, A. N.


Hacking, Captain Douglas H.
MacRobert, Alexander M.
Smith-Carington, Neville W.


Hall, Lieut.-Col. Sir F. (Dulwich)
Makins, Brigadier-General E.
Smithers, Waldron


Hail, Capt. W. D'A (Brecon & Rad.)
Malone, Major P. B.
Spender-Clay, Colonel H.


Hanbury, C.
Manningham-Buller, Sir Mervyn
Sprot, Sir Alexander


Hannon, Patrick Joseph Henry
Margesson, Captain D.
Stanley, Lieut.-Colonel Rt. Hon. G. F.


Harland, A.
Marriott, Sir J. A. R.
Stanley, Hon. O. F. G. (Westm'eland)


Harmsworth, Hon. E. C. (Kent)
Mason, Lieut.-Colonel Glyn K.
Steel, Major Samuel Strang,


Harrison, G. J. C.
Meller, R. J.
Storry-Deans, R.


Hartington, Marquess of
Merriman, F. B.
Streatfeild, Captain S. R.


Harvey, G. (Lambeth, Kennington)
Meyer, Sir Frank
Stuart, Crichton-,Lord C.


Hawke, John Anthony
Mitchell, W. Foot (Saffron Walden)
Stuart, Hon. J. (Moray and Nairn)


Headlam, Lieut.-Colonel C. M.
Mitchell, Sir W. Lane (Streatham)
Styles, Captain H. Walter


Henderson, Capt. R. R.(Oxf'd, Henley)
Mond, Rt. Hon. Sir Alfred
Sueter, Rear-Admiral Murray Fraser


Heneage, Lieut.-Colonel Arthur P
Monsell, Eyres, Com. Rt. Hon. B. M.
Tasker, R. Inigo.


Henn, Sir Sydney H.
Moore, Lieut.-Colonel T. C. R. (Ayr)
Templeton, W. P.


Herbert, Dennis (Hertford, Watford)
Moreing, Captain A. H.
Thompson, Luke (Sunderland)


Hills, Major John Waller
Nail, colonel Sir Joseph
Thomson, Rt. Hon. Sir W. Mitchell-


Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.
Nelson Sir Frank
Tryon, Rt. Hon. George Clement


Hogg, Rt. Hon. Sir D. (St. Marylebone)
Neville, Sir Reginald J.
Vaughan-Morgan, Col. K. P.


Holt, Capt. H. P.
Newton, Sir D. G. C. (Cambridge)
Wallace, Captain D. E.


Hope, Sir Harry (Forfar)
Nuttall Ellis
Ward, Lt.-Col. A. L. (Kingston-on-Hull)


Hopkins, J. W. W.
Oakley, T.
Warrender, Sir Victor


Horlick, Lieut.-Colonel J. N.
O'Connor T. J. (Bedford Luton)
Waterhouse, Captain Charles


Hudson, Capt. A. U. M. (Hackney,N.)
O'Neill, Major Ht. Hon. Hugh
Watson, Rt. Hon. W. (Carlisle)


Hudson, R. S. (Cumberl'nd, Whiteh'n)
Oman, Sir Charles William C
Wells, S. R.


Hume, Sir G. H.
Ormsby-Gore, Rt. Hon. William
Wheler, Major Sir Granville C. H.


Hume-Williams, Sir W. Ellis
Penny, Frederick George
White, Lieut.-Col. Sir G. Dalrymple-


Hunter-Weston, Lt.-Gen. Sir Aylmer
Perkins, Colonel E. K.
Williams, A. M. (Cornwall, Northern)


Huntingfield, Lord
Perring, Sir William George
Williams, Com. C. (Devon, Torquay)


Iliffe, Sir Edward M.
peto, Sir Basil E. (Devon, Barnstaple)
Williams, Herbert G. (Reading)


Inskip, Sir Thomas Walker H.
Peto G. (Somerset, Frome)
Wilson, Sir C. H. (Leeds, Central)


Jackson, Sir H. (Wandsworth, Cen'l)
plicher, G.
Wilson, R. R. (Stafford. Lichfield)


James, Lieut.-Colonel Hon. Cuthbert
pilditch, Sir Philip
Winby, Colonel I. P.


Jones, G. W. H. (Stoke Newington
pownall, Sir Assheton
Wise, Sir Fredric


Kidd, J. (Linlithgow)
price, Major C. W. M.
Wolmer, Viscount


King, Commodore Henry Douglas
Raine, Sir Walter
Womersley, W. J.


Kinloch-Cooke Sir Clement
Rawson, Sir Cooper
Wood, E. (Chest'r, Stalyib'ge & Hyde)


Knox, Sir Alfred
Reid, D. D. (county Down)
Wood, Sir Kingsley (Woolwich W.)


Lamb, J. Q.
Remer, J. R.
Wood, Sir S. Hill-(High Peak)


Leigh, Sir John (Clapham)
Rice sir Frederick
Woodcock, Colonel H. C.


Lister, Cunliffe-, Rt. Hon. Sir Philip
Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Worthington-Evans, Rt. Hon. Sir L.


Lloyd, Cyril E. (Dudley)
Roberts, E. H. G. (Flint)
Young, Rt. Hon. Sir Hilton (Norwich)


Loder, J. de V.
Roberts, Sir Samuel (Hereford)



Long, Major Eric
Ropner, Major L.
TELLERS FOR THE NOES.—


Looker, Herbert William
Russell, Alexander West (Tynemouth)
Mr. F. C. Thomson and captain




Viscount Curzon.


Resolution agreed to.

CLAUSE 25.—(Payment of Income Tax on certain Copyright Royalties by de duction.)

Amendments made: In page 11, line 30, after the word "copyright," insert the words
and the reference to royalties or sums paid periodically for or in respect of a copyright shall not include royalties or sums paid in respect of copies of works which are shown to the satisfaction of the Special Commissioners to have been exported from the United Kingdom for distribution outside the United Kingdom.

In line 30, at the end, insert the words
(5) Rule 23 of the General Rules shall be extended so as to apply to all payments to which this Section applies."—[Mr. Churchill.]

CLAUSE 30.—(Amendment of Section 84 of Income Tax Act, 1918.)

Amendment made: In page 17, line 5, at the end, insert the words
and Sub-section (1) of Section eighty-four of the Income Tax Act, 1918. shall have effect as if—

(a) the words 'for any year of assessment' were omitted;
(b) for the words 'on or before the thirty-first day of May' there were substituted the words within two months after the date at which a vacancy has occurred';
(c) the words 'for that year and for every subsequent year' were omitted."—[Mr. Churchill.]

CLAUSE 31.—(Amendment of 12 and 13 Geo. 5, c. 17, s. 21.)

Mr. REMER: I beg to move to leave out the Clause.
I make no apology for moving this, because there has been so much confusion of thought, not merely in this House but outside, as to what the Chancellor of the Exchequer is really proposing, even at this late hour, that I think the best thing that can be done is to leave it out of the Bill altogether and for the right hon. Gentleman to get in touch with the business community, who really know the difficulties, and to approach the matter once again. It does not matter in the slightest what the Chancellor of the Exchequer intends to do. It is what the Bill really proposes that matters. If I or any of my friends, or any of the hon. Gentlemen opposite for that matter, had to appear before the Lord Chief Justice and tell the Lord Chief Justice that the Chancellor of the Exchequer on the Finance Bill said so-and-so, he would immediately reply that he did not care what the Chancellor of the Exchequer had said, and that the matter of importance was, what was in the Statute itself. I submit that this House has reason to complain, because we have on the Order Paper a long string of very technical Amendments which only appeared there on Friday last. I submit that it is rather discourteous to the House that important matters like this, which have to be considered, sometimes by legal opinion, should appear at such a late date, when it is practically impossible for anyone except the Government advisers to give a real opinion as to what they may mean.
I do not wish, at this late hour, to reinforce the arguments, but I can give a further argument in following up the argument which was used by my hon. Friend the Member for Reading (Mr. H. Williams). My hon. Friend during the last Debate mentioned the case of Lever Brothers. The late Lord Leverhulme was the owner of all the ordinary shares in the firm of Lever Brothers, and my hon. Friend showed how this Clause would cause great disadvantage to the progress of that concern. I will quote another example. I will quote the concern of Morris Motors Ltd. Mr. William Morris floated this concern only
about 12 months ago. The only public issue in connection with this concern was in preference shares. Mr. William Morris took as his portion of that business the ordinary shares. When the first year was being completed, Mr. Morris decided that he would take nothing out of that concern, that he would use the whole of the profits that bad been made—which were considerable—for building up the concern, and building it on progressive lines in order to find more work for the workpeople, and, incidentally, to increase the profits for himself. I have never held the view which is so vociferously used by hon. Members opposite that profits are wicked. I have always held the view that profits are a good thing. Profits are a good thing, because the more profits there are the better the wages of the workpeople. I submit that it is no business whatever of the Chancellor of the Exchequer or of any Government official what portion of the profits of an industrial concern are distributed to the shareholders. The way in which business has been built up has been by retaining in business concerns a large proportion of the profits in order to keep works up-to-date and efficient.
For that reason, I submit that the Chancellor of the Exchequer should to-night be a brave man and should admit that he has played about with this subject to a very considerable extent. He has moved numerous Amendments, many of which it is utterly impossible for Members of this House to understand, owing to the late date at which they have been put on the Order Paper. If he is a brave man, as I know he is, he should have the courage to withdraw this Clause, and in the 12 months succeeding should consult fully the means by which the objects which he has so lucidly explained as being those which he desires to achieve can be framed in language which really defines those objects in the Statute.

Mr. SMITHERS: I am sorry that I cannot follow the hon. Member for Macclesfield (Mr. Remer)—

Mr. SPEAKER: I thought the hon. Member rose to second the Amendment.

Captain BOURNE: I beg to second the Amendment.
I do so, because I am afraid that this Clause, even with the Amendments of my
right hon. Friend, may at some future date be interpreted in the Courts to go far beyond the intention of this House as expressed in the Committee stage. There is always a danger when we pass complicated Measures of this sort that the Court will pay no attention to the Debates in this House but will hold that the language means something which we did not intend. I am well awer that this Clause aims at evasion of Super-tax by what is known as the one-man company. That is an aim with which I am in full sympathy, but I am very much afraid that the language of the Clause will go far beyond that, and my object to-night is to ask my right hon. Friend to see whether between now and next year, which is the earliest date that this Clause can possibly become operative, it will not be possible to devise some better means of dealing with what is an acknowledged evil.
I suggest that what matters is not the amount that the company puts to reserve but what use it makes of the reserves. If the reserves are used for the purpose of making bogus loans to the directors of a private company, that is a thoroughly undesirable thing, and I suggest that in such cases probably the best thing would be to give power to the Treasury or the Inland Revenue to appeal to the Court to revoke the Charter of Incorporation, because it is obvious that any company dealing on those lines has no business whatever to remain on the list of companies having a charter of incorporation.
Another point to be considered is whether it would not be better to assess the reserves for Super-tax if and when they are distributed. It is quite contrary to our Common Law that a company should be charged Super-tax. Super-tax has always been a tax on the individual and not on a concern. I feel that in this Clause and in the Act of 1921 we are attempting to stop an acknowledged evil by taking completely wrong lines. I hope my right hon. Friend will be able between now and next year to see if he cannot get a Departmental or other Committee together to consider if it is not possible to frame legislation which will achieve his object without doing the positive damage to legitimate business which I am afraid will arise from this Clause.

Mr. CHURCHILL: The mover of this Amendment has cast his remarks in a somewhat controversial form, but I do not intend to adopt that method in dealing with this subject, and I hope, in avoiding anything which may be calculated to raise an atmosphere of controversy, I may count on the assistance of hon. Members in all parts of the House. There has been a great deal of agitation and some irritation about this Clause, formerly Clause 29, now Clause 31, and in addition to this there has been an immense amount of apprehension and alarm and misconception which in my honest opinion is absolutely unjustified. This Clause does nothing but extend the area of the provisions which, five years ago, were passed through this House by my predecessor the right hon. Member for Hillhead (Sir R. Horne). It extends them from an area of 40,000 companies to an area of approximately 75,000 private companies. That is all it does. It in no way menaces the development of private company business in a way different from the conditions under which that business has lived and flourished during the last five years. During the whole of those five years only 550 cases have been challenged, out of 40,000 companies, by the Board of Inland Revenue, and in only 250 cases has actually a claim for payment of the tax been made, and in less than that number of cases has that claim been paid.
It is now proposed, roughly speaking, to double that area, and I dare say to double the application. But the idea that this extension of these processes will be injurious to the proper building up of reserves and the development of company business is absolutely without foundation. I have accepted Amendments with great readiness, and have accepted the cooperation of those Members of this House who have made a sincere and profound study of this complicated question. The reason why our Amendments have been late in appearing on the Order Paper is not because of idleness or slothfulness on our part but because of the careful and painstaking attention to the details of this matter, so that we should really represent the ultimate possible reassurance to bona fide business that it will not be interfered with by anything that is done. I have spoken of private company business, but all private company business does not come
within the ambit of this Clause, although very nearly all. But let us see what a small place private company business occupies in the general economic productivity of this country. I fancy the figures will astonish the House. I am dealing now with concerns making a profit exceeding £2,000 a year. Of these there are 15,000 public companies making £418,000,000 profit. There are 15,000 private companies making £55,000,000 profit. Then we come to the firms and individual traders, of whom there are 20,000, making £100,000,000 profit, and professional men, numbering 5,000, making £25,000,000 profit. Thus you see out of about £600,000,000, only £55,000,000 is made by private companies.

Mr. H. WILLIAMS: The Clause is not limited to that.

Mr. CHURCHILL: The Clause is less than the total of the private companies and more limited than the private companies. If you come to undertakings making profits not exceeding £2,000 a year the figures are about in the same proportion. There is £252,000,000 profit made other than by private companies and £25,000,000 by private companies. Thus the House will see we are dealing with a portion of business which is less than 10 per cent. of the total national business, but all the arguments which have been used would lead one to think that the entire fund of enterprise and ingenuity in Britain would be for ever killed and cut off! It is in comparing private companies with private firms and partnerships and private individuals that the greatest interest in this subject resides. Taking concerns having profits of over £2,000, there are 15,000 private companies yielding £55,000,000 profit, and 20,000 private firms and individual traders yielding £100,000,000 profit—that is nearly double in importance. What is the position of these private firms and partnerships? They pay the whole taxation, Income Tax and Super-tax, on the net profits of the year. They pay the whole of it. The right hon. Gentleman opposite told how the poor shippers in the North with small fishing fleets had built them up by savings and so on, and how they would be ruined if Super-tax was exacted from them. Nearly all the strongest businesses in this country have
been built up by private firms and individuals bearing the whole brunt of the taxes. That is so.
I will give some illustrations of the way in which some private firms have built up their businesses. Firm A, for the four years ending 1925, paid full taxes, Income Tax and Super-tax, on £2,600,000, and, notwithstanding that, they put to reserve £1,150,000, or 44 per cent. Firm B, in the five years ending 1926, paid full taxes on £670,000, and, notwithstanding that, they put £250,000 to reserves, or 37 per cent. Is it not right that they should? I am showing it is possible with the full burdens of the State nevertheless to put substantial sums of money away and build up reserves. I have a number of instances here but I will not weary the House with any more, because I altogether demur to the suggestion that this Clause, with its corrective influence, will in the slightest degree hamper the building up of proper reserves, which is of the utmost importance to industry, by the private companies who come within its ambit. On the contrary, it is my submission to the House that after all the thought and argument which these weeks have produced, Clause 29, which is now Clause 31, so far from being an injury is going to be a great protection and support to private company business.
It is a very small area, not much more than 10 per cent. of business, which is becoming pervaded with this particular form of tax evasion. At present it is very small—the evil has only just begun—but if it came to pass that over a period of ten years it was found that private company business was being so used on a scale which does not exist now, and, if there were this evasion, apart from legitimate business, and we did not deal with it—if that came to pass and the whole field of private company business came to be brought into disrepute by the fact that it was vitiated by this particular practice, then I say the privileges which private companies enjoy compared to the much more important and more numerous private traders, would, as a whole, be brought into question. Undoubtedly they would be called into question.
It is to my mind a very slight thing that we should ask that the private companies of this country, in return for the great privileges and advantages which
they enjoy over the more important and more numerous private firms and partner-ships, should accept and acquiesce in the carefully guarded provisions of this Clause in order that private company business may continue to enjoy those privileges and advantages without being vitiated by continued imputation of abuses. I cannot hold out any hope of accepting the proposal to withdraw the Clause, as my hon. Friend so ingenuously suggested. I said in the Debate on the Committee Stage that if there is any better way of achieving the necessary purpose that the Government had in hand, it is a way which we shall be ready to follow. I make no objection to officials assisting any responsible body of Members of Parliament who seek to investigate an alternative method. I am quite ready, if it can be found possible, to adopt an alternative method. I admit quite frankly that it is unfortunate that the declaratory form of our legislation should proceed, in form at any rate, by an examination of the reserves. I would have preferred that it should have proceeded by an examination of the conditions of exceptional withdrawal from the reserves.
I put this point, not in any hurry but weeks ago, to my expert advisers on this extremely technical matter, and they assured me that, great as have been the difficulties and complications of the method that we have adopted, the alternative method would have produced another set equally and probably more formidable. The whole question of liquidation of companies and bonus shares and so forth would have been raised, and we would have fallen into another thicket equally thorny and more impenetrable— I should not say more impenetrable, but more resistant, than that through which we are now successfully making our way. Nevertheless, I am prepared to say, not for the purpose of keeping this controversy alive, because I shall regard the vote to-night as a vote of serious decision by the House, but for the purpose of any improvement that can be suggested—I am quite ready to adhere to what I said upon the Committee stage, if there is a better way that can be found. I cannot say that I am very sanguine that a better way will be found. Under pressure of this discussion every avenue
has been explored, and I am now in a position to say that all that can be done in the way of reassuring the bona fide traders and of dispelling the alarm which has been spread and needlessly spread, has now been done.
11.0 p. m
I have put down Amendments which have been most carefully considered. I do not think I shall be able to go any further at all if in the course of this year better methods can be suggested before these taxes come into operation, there is still another vote to be taken in 1928 on the Resolution, and I shall be quite ready to profit by any advice I may receive and to consider bona fide suggestions from any inquiry that may be set on foot. But so far as this particular Clause is concerned, I am confident that it will do no harm whatever to legitimate business and that the vast mass of private companies, themselves only a small part of the business of the nation, will not be aware of any change whatever in the way in which their relations with the tax-collecting authorities are disposed. I am certain that this will, in fact, strengthen the position of private companies by freeing them from an abuse which, growing with their growth and strengthening with their strength, might ultimately have choked them entirely.

Mr. W. GRAHAM: I think Members of the House who are endeavouring to view this problem impartially will agree that there has been a great deal of exaggeration in much of the criticism of and opposition to these proposals. To those of us who were members of the Royal Commission on Income Tax in 1919, it will appear that a great deal of this exaggeration has been due to failure to recall the terms of the Section of the Act of 1922. It is the duty of the House to remember to-night that what is really before us is the question of evasion. It was asserted in the last Debate on this subject that such was not the real issue before the House and that we were not engaged in dealing with people who tried to practice evasion, but the plain, simple truth of this controversy is that if we go back to the work of the Royal Commission and to the Section of the Act of 1922, we find that this is mainly a problem of evasion. In the
discussion of recent weeks numbers of people have forgotten that Section 22 was itself a compromise which was reached in this House when very much stronger proposals were intended. Many of us can recall those Debates and, in fact, during the passage of that Section of the Act through this Chamber, important safeguards were introduced.
In a great deal of the discussion of the past month no attention whatever has been paid to some of the preliminary words in that Section which were directed to this problem of the avoidance of the payment of Super-tax and numbers of people have written and spoken as if no provision at all has been made for the current needs of business and no recognition of the amounts to be placed to reserve, although those were very important ingredients in the Section of the Act of 1922. It has also, apparently, been forgotten by some, that those safeguards in the Act of 1922 remain there and what we have to emphasise to-night is that the attempt which was then made to deal with the problem of the evasion of Super-tax has not proved its efficiency, that, in the intervening time, individuals have found a way of getting round this Section and that, as the Chancellor of the Exchequer plainly demonstrated, considerable sums—I do not say much in the aggregate having regard to our total revenue, but still considerable sums and sums which we urgently require—have gone beyond the reach of the Revenue authorities. Accordingly, these better provisions are required.
What is the real objection to this proposal? It appears to me to be two-fold. It is suggested that there is going to be interference with the proper provision of reserves in normal, well-conducted businesses, and that in the process of trying to prevent tax evasion, you are going to do injury to a large number of well-meaning and thoroughly honest people. In reply to that objection I think we have said sufficient already to show that not only do all safeguards of the Section in the Act of 1922 remain, but that there are all the additional safeguards which the Chancellor of the Exchequer has now imported into these proposals. These include the safeguard of the declaration and the Special Com-
missioners or the Court of Referees, and all the rest, so that I think that objection has been largely met. The other objection is an objection to what is called the interference of the bureaucrat in privately-run business. Very well, on that we have simply to make up our minds whether or not we are going to deal with the problem of evasion. I do not dispute, as a member of the Royal Commission in 1919, that there are other ways of dealing with this difficulty, and to those other ways I hope to refer in a minute or two. But taking a line through the Section in the Act of 1922 and the experience of the Revenue since, there is not the least doubt that a plain duty confronts us to strengthen that Section now, and, for reasons which will be best known to themselves, the Chancellor and the Government have taken the line of strengthening the proposal in the legislation of 1922.
On this side, we are bound to support the right hon. Gentleman in that course. Although we do not agree with this particular system of industry and commerce, we fully recognise that business must provide reserves for the purpose of development and for many other purposes upon which, I have no hesitation in saying to-night, the progress of business as presently constituted depends. We know very well, and everybody knows who has gone into this behind the scenes, that sums have been employed in this way, not for a legitimate purpose at all, but for the express purpose of putting the individual beyond the reach of a rate of duty which was admittedly high, but was nevertheless the law of the land and, as such, should be enforced in this Chamber and everywhere else. It is that interference which I find is the important point among hon. Members opposite in a great deal of this discussion, but if we make up our minds at all to deal with evasion, some kind of inquiry of that description is absolutely essential, and accordingly we can plead to-night that there are all the safeguards of 1922 and the additional safeguards in the Clause which the right hon. Gentleman has introduced.
The last word, and a very hurried word indeed, which I would offer to the House is this: The objection which many of us take to this method of dealing with the problem does not turn on the at-
tempt to prevent evasion at all. We would be much more drastic than the right hon. Gentleman in a course of that kind. Our objection is that you are dealing here piecemeal with individual items in the structure of Income Tax and Super-tax in this country. If any hon. Member will turn to the Report of the Royal Commission in 1920, he will find that, in point of fact, the whole Report was designed to be one comprehensive whole, I do not say to be adopted at once, but, at all events in this matter of evasion, to be adopted very largely in that form if it was to be adopted at all.
Moreover, it was an integral part of that scheme that you should try to rewrite this legislation in terms that would be understood by human beings. That, of course, has not yet been attempted. The Chancellor of the Exchequer, I know, is not a lover of these extreme technicalities, and there are very few people who could lay their hands on their hearts and say they understand what all these Sections in the Act of 1918 and all this legislation by reference mean. The fundamental thing is to rewrite this in terms that people can understand. You will then get a straightforward proposition, and I would make that the basis of the scheme in dealing not only with the problem of evasion, but with the many other forms of Income Tax and Super-tax. I merely want to add that this is the line which, I believe, any fresh investigation should pursue. So far as we on this side of the House are concerned, we think that the Chancellor of the Exchequer has done everything that should be done on this Clause by way of declaration and appeal. Accordingly, to-night, if he should have any slight embarrassment with his followers, I think it would be our duty to side with him against those who would abuse our Income Tax and Super-tax system.

Sir HILTON YOUNG: It occurs to me that even at this late hour the right hon. Gentleman the Member for Central Edinburgh (Mr. W. Graham) does not yet understand, if I may be permitted to say so, the weight of the objection to this Clause. There is no difference of
opinion at all between us and him as to the keenness of our pursuit of the evader. The whole question is, what is evasion? Some of us who have listened to his argument think that that which he considers to be evasion is not evasion. It appears to me that the Chancellor of the Exchequer to-night made really the most promising statement as to the future of this legislation which we have heard, and I, for one, value it a good deal more than I value his Amendments. It appears to me that his statement to-night does point forward on the path of hope, whereas his Amendments do not.
I have criticised this Clause on two main grounds. In the first place, because it is unsound legislation to try to define the province of evasion by setting out the category of companies which come within the scope of the legislation, and to try and define that category by the nature of the control of the company, the number of members, the character of the issue of shares, and so on. That involves you in a perfectly impossible task, where you will always have too wide a borderland of hard cases. That is unsound legislation. The hon. and gallant Gentleman the Member for Oxford City (Captain Bourne) hit the nail on the head when he said that if you had a company which was defrauding the Revenue the proper remedy was not to put that company into a special category, but to deprive it of the privileges of registration altogether. The other and the main ground on which I criticise this Clause is because of the introduction of the idea that the officials of the Inland Revenue should have the right to say what ought and what ought not to be put to reserve. The right hon. Gentleman the Member for Central Edinburgh naturally views the interference of public officials with private business without abhorrence, but we view it with abhorrence. We are most unwilling to assent to any extension of it.
I view with some suspicion the latest Amendment which the Chancellor of the Exchequer proposes, because it again introduces the idea that the officials of the Inland Revenue are to say whether sums have been rightly put to reserve or not. On a previous occasion I defended the definition of evasion in this matter by the adoption of the test that one is to consider, not whether sums have been
properly put to reserve, but whether they have been improperly drawn out of reserve. One ought to look on sums put aside bona fide for capital purposes as not evasion, and only those transactions as evasions by means of which money which is in fact income comes back into the hands of the Super-tax payer in some form of capital payment.
The impression which the Chancellor of the Exchequer's statement produced on my mind to-night is that he considers that the question as to whether the proper test is not drawing from reserve, rather than putting into reserve, is open theoretically to the answer that that is a possible course, and that he has been turned aside from it only by the practical difficulties, and that if he could be convinced that the practical difficulties of that course were no greater than those of the other, that it might then be possible to adopt that as a basis for legislation. I find myself so much encouraged by the fact that is recognised, and not only recognised, but now acclaimed, by the Chancellor of the Exchequer—that gives me so much hope of a fruitful outcome of those further inquiries which he has promised in the coming year, that it reconciles me to the passage of this Clause.

Mr. SMITHERS: I want to say quite frankly that though I do not recede in principle from my objection to this Clause, in view of the Chancellor's speech to-night, in view of the way in which he has met us, in view of his pledge that he will consider any proposals that are put forward in the coming year, and in view of the fact that the Clauses do not come into operation until next year, I propose to support the Chancellor in the Lobby to-night. There is one technical point on which I should like to get a reply from the Government to-night. On page 18 of the Bill between lines 25 and 40, certain companies are put into certain categories. In one of the categories are companies whose shares have been quoted in the Official List on a stock exchange. I want to ask the Attorney-General why only the Official List has been included, and not the Supplementary List. The requirements of the Stock Exchange Committee in regard to including companies in the supplementary
list are substantially the same as in the case of the Official List. The difference in the requirements is only in respect of certain things which are physically impossible when an early application is made for permission to deal. Where no prospectus has been publicly advertised the Stock Exchange Committee require all the material conditions to be fulfilled, and those conditions have been taken from the Companies Acts. The Stock Exchange Committee do not give permission to deal in the securities of any private company. I would say in conclusion that I have no axe to grind in this matter, but if securities which appear in the Official List are to be included, I can see no reason, and those in the City who know about these things can see no reason, why the securities in the Supplementary List should not also be included.

Mr. RUNCIMAN: The Chancellor of the Exchequer has been very definite in his assurance that no one need have any apprehension about the operations of Clause 31. Whatever may be the feeling of the Chancellor of the Exchequer himself, he must be aware of the fact that, whether they are right or wrong, there are very many people who have been filled with apprehension, and quite rightly. They are alarmed at what they regard as an entirely new departure with regard to company law and company operations. They are unable to see in the Clause and the Amendments exactly what the Chancellor of the Exchequer is driving at, and, while they read everything the right hon. Gentleman says with respect, just as we listen to him with respect, they occasionally hear, as we have heard to-night, a slight contempt for the small concerns which have grown into large concerns. He spoke of fishing-boat companies which had grown into large merchant fleets, but it is an exaggeration of which nobody connected with the shipping industry would ever have been guilty. It is no use overlooking the fact that a very large number—I do not know the exact proportion, and I do not think the officials know at Somerset House—of successful businesses have grown up by the operation of small concerns which are not included in the Stock Exchange Supplementary List whose benefits have been restricted to a small number of people,
but nevertheless they have done a great service to British industry and commerce. The suggestion of the Chancellor of the Exchequer is that there are only 15,000 companies who made £55,000,000, whereas a smaller number of private firms made much more.

Mr. CHURCHILL: There were 20,000 firms that made £100,000,000 and 15,000 companies that made £55,000,000 only in the area of firms yielding profits of over £2,000 a year.

Mr. RUNCIMAN: The Chancellor of the Exchequer must have observed that during the last three or four years a considerable number of companies have made no profits at all, and he must be aware of what happened in the coal trade, the iron trade, and the cotton trade. A large number of companies in Lancashire have made no profits since 1922, and it is impossible to take any scale of profits as providing a scientific division. In some trades it has become the custom to conduct the operations through small private companies which are not quoted on the Stock Exchange.

Mr. RADFORD: The same conditions of trade will have the same effect on private firms.

Mr. RUNCIMAN: The private firm system is restricted to a comparatively large number of miscellaneous trades but not basic trades, and it is in the basic trades where there has been the greatest depression during the last few years. The Chancellor of the Exchequer, in his Budget statement called attention to the fact that it is the basic trades that have suffered. Some private firms have been showing large profits, and the Chancellor of the Exchequer has drawn a large proportion of his income from these subsidiary concerns. The reason I draw attention to these facts is to show that what is suggested is an unscientific way of dividing up the trades of the country, and it has no bearing on Clause 31 or the Amendments which the Chancellor of the Exchequer has put down. I do not think the right hon. Gentleman has paid half enough attention to the trouble that comes from absolute uncertainty. The 5,000 companies to which attention has been drawn may or may not come within the purview of this legislation, and in
every one of those companies they will have to go very slow during the next twelve months, for it will be impossible for them to be assured of their position. If the Chancellor can say definitely what are the 5,000 companies that are left out, he will give a great deal of comfort to a large number of business people all over the country, but when they get this Clause, which now covers no less than four pages of print, I do not believe they will even then be assured as to whether they are in or out. The Chancellor talked about getting into a thicket if he adopted any other method. This is a thicket. We have, since last Friday, when the Amendments were put down, been trying to find out from our legal advisers what exactly the Clause means. I challenge even the Attorney-General to give us a short and simple account of what is to be found in these four pages. He himself will not know for years to come. If the Clause remains unaltered, it will provide ample employment for the lawyers for many years to come. Case after ease will go into the Courts, and there will be all sorts of decisions as to what it means, apart altogether from the decisions which will be arrived at before the Board of Referees. I do press on the Chancellor of the Exchequer the necessity for putting the business community in a position to know whether they are in or whether they are out. That, really, is the important consideration. It is impossible for men to undertake obligations unless they know whether or not one-third of the, reserves they set aside are to be in jeopardy. If they know that they have to provide definitely that one-third of the reserves they set aside—

Mr. CHURCHILL: In jeopardy of what?

Mr. RUNCIMAN: Of coming within the meshes of this Clause, and finding that they have to pay, not only Super-tax on the amount they have withheld from division, but on their whole gross profits. That is the penalty which the Chancellor of the Exchequer imposes upon those who come within this Clause, and who, under the decision of the Special Commissioners and the Board of Referees, are stated to have put too much money aside for reserves. The standards that are going to be applied as to what is sufficient or insufficient have never been defined, and I
venture to say that it is quite impossible for any Government Department to lay down any rule which will guide the Special Commissioners as to what is or is not sufficient.
I have before me a sample of scores of cases that have come to my notice. It is a case in which the reserves of a company have been used for some six purposes, and, of those six purposes, as far as I can tell—I do not think anyone can be sure, on the Clause as it now stands—five would be permissible, but the sixth would certainly be in question, for it provides for the building up of the financial security of the concern with a view to meeting set-backs in trade. Who is to decide what is a sufficient amount for that? The experience of businessmen who have been in the trade all their lives is the only guide. Some men take a conservative view, while others take a more adventurous view as to what is or is not sufficient, and we all know that during the last few years only those who have taken the most conservative view with regard to reserves have been able to survive successfully. Then come a lot of doubtful provisions. There is a provision made for what is called the workers' savings bank and division of employés' profits. We know nothing about what is to happen to that. No rule has been laid down for the guidance of the Inland Revenue Department. If the Chancellor of the Exchequer is going to do it, by all means let it be known as soon as possible, because some profit-sharing schemes will be brought at once under the purview of the Act unless he assures us that in no case will they be affected.
I could give a number of other doubtful points, but I would only say that if the Chancellor is going to carry out during the next 12 months what he has stated—I think he took rather too severe a view of the business community, and talked a little harshly about those who have objected to this legislation—if he is going to carry out what he has stated, not only to-night but in a previous Debate, I think the House would be well advised to leave the next twelve months to be a period for reconsideration, for I am quite certain that, if the Chancellor and his advisers will get into close and intimate touch with all the best authorities on business of the kind that will be
affected by these provisions, they will not be able to come before the House 12 months hence with a Clause like this. If the Chancellor of the Exchequer wants assistance in getting at evaders, he will get it from all honourable business organisations in this country, and they will tell him a great deal more than he will ever learn from his officials. The proper way to get that co-operation is to regard those with whom you are dealing as perfectly honest, honourable men, and, if you take them into collaboration as such, they will co-operate. But, if they are to be dealt with, as they are now, under an immense Clause the meaning of which they do not understand, it will mean that during the next 12 months a definite brake will be put on the enterprise of a good many people who will be bound to play for safety, and that will have a detrimental effect on the trade of the country. So far as I am concerned, I shall not vote against the Clause, because, as I said in the last Debate, I am in agreement with its general object, but it is only on the definite assurance given by the Chancellor of the Exchequer that during the next 12 months he will confer with those who are in very close touch with these affairs.

Mr. DENNIS HERBERT: I have not changed my view that this whole scheme is bad. But if the Chancellor of the Exchequer is going to do anything to check the spread of tax avoidance in this way, he is bound to proceed on the lines of patching the legislation of 1922. The great trouble about this matter has been the alarm which it has caused in business circles and the hindrance to business caused by apprehension. That arises from the fact that the legislation is directed, not against the shareholder who avoids taxation, but against the company, and many innocent companies are within the class of company affected. But the Chancellor has put forward such a strong case that I do not think the House would be doing rightly if they were to persuade him to drop this Clause altogether this year and thus encourage the man who is attempting unfairly to avoid taxation. He has met criticisms which have been made to an extent which, in the opinion of myself and others who are far more competent to judge than I am, have this result, that
it is at least a matter of a hundred to one that no company that is not controlled by men who are endeavouring to avoid taxation will be interfered with in the very least in practice by this legislation.
If that be the case, I think we are justified in supporting the passage of this Clause with the Amendments which the Government have down on the Paper. People who do not understand this legislation, and who grossly misrepresent it, are doing far more harm to business than the Government is in making these proposals. The misrepresentation—I do not say for a moment that it is willful—of people who do not understand these Clauses has done, and is likely to do, very much more harm by the destruction of confidence than the passing into law of this Clause with the Amendments to it. One-ship companies and other companies of that kind, if they go to any experienced lawyer and take proper advice, are likely to be advised, under the Amendments now on the Paper, that there is no practical risk whatever of their being interfered with in the slightest degree. I would only add this. The right hon. Gentleman the Member for West Swansea (Mr. Runciman) has fallen into the same mistake as many others in considering that this particular Clause proposes to put to the Commissioners that they are to decide what is the right amount to put to reserve. It does not do so at all. What the Commissioners have to decide is this. Has there been an unreasonable withholding from distribution? If they decide that there has been an unreasonable withholding from distribution, they can bring the law into operation, notwithstanding the fact that the taxpayer has made use of a particular system of reserves in order to pretend that he is living on capital instead of on income. It is only when the Commissioners find there has been unreasonable withholding that they can interfere in any way with the amount which has been placed to reserve.

Mr. REMER: I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. SNOWDEN: Perhaps I should be meeting the wishes of the House if I were to ask the Chancellor of the Exchequer how far he proposes to go to-night. I think he will agree that we
have made quite unexpected progress. Very little remains on the Paper. If I may make a suggestion, it will be that Supply business might be put down for to-morrow, and then, in something like two hours or so, we might finish the remaining Amendments on the Paper. I hope it may be within the discretion of the Chancellor of the Exchequer to acquiesce and that he will adopt the suggestion I have made.

Mr. CHURCHILL: I think there is a great deal to be said for the suggestion the right hon. Gentleman has made. I agree that we have made extremely good progress to-day. The House has shown commendable facility in dealing with essential points in a comparatively short time. I certainly should not attempt to set the will of the Government against that of the Official Opposition or against the House as a whole in any way, and, therefore, what, I am going to make is in the nature of a counter suggestion. It is certainly of great advantage that we should put down Supply for tomorrow, count it as a Supply day, and devote a portion of it to finishing the Report stage of the Finance Bill. It will enable us to save one day which may be a great convenience if anything unforeseen should arise. It may be a matter of great convenience to Members generally without in any way affecting the conduct of public business. I suggest that we should finish Clause 31. The general Debate is approaching its conclusion. The Amendment has been withdrawn. There are certain Amendments to be moved, which I do not think will take very long, and then we should start with the next Clause at such time that Supply is concluded to-morrow afternoon. I think it is entirely in accord with the suggestion of the right hon. Gentleman, and the Government will give their accord to the proposition if it should commend itself to the House.

Mr. RUNCIMAN: May I ask whether a Motion will be put down declaring that to-morrow shall count as a Supply day, even if other business be taken?

The PARLIAMENTARY SECRETARY to the TREASURY (Commander Eyres Monsell): There is a Motion already on the Paper to safeguard the Supply day. The Supply will be taken first Order, and there is a Motion allowing the House to take other business before Eleven o'clock.

Mr. BUCHANAN: With respect to the Supply day, I cannot accept the suggested arrangement, and, if my colleagues were here, we would endeavour to upset it. The Prime Minister has already announced the business for this week. I understand that the Supply to-morrow will be the Colonial Office Vote. Those hon. Members who wished to discuss Colonial questions have had no notice that the Colonial Office Vote will be on to-morrow. It is unfair, at eleven o'clock at night, to say that tomorrow the Colonial Office Vote will be taken, thereby giving hon. Members no reasonable opportunity of preparing their case. While I have no wish to set myself against the will of the House, I cannot accept that arrangement, which I regard as a very bad arrangement.

Amendments made:

In page 17, line 22, leave out the word "whether," and insert instead thereof the words "otherwise than."

In line 23, leave out the word "any," and insert instead thereof the word "an."

In line 23, leave out the words "binding on the company or not," and insert instead thereof the words
entered into by the company before the fourth day of August, nineteen hundred and fourteen.

In line 26, after the word "property," insert instead the words
which the company was formed to acquire or which was the first business, undertaking, or property of a substantial character in fact.

In line 32, leave out the word "the," and insert instead thereof the words "any such."

In line 39, leave out the word "the," and insert instead thereof the words "any such."

In page 18, line 4, at the end, insert the words

Provided that the addition to the said section twenty-one of the foregoing new paragraph shall not operate so as to make the said section apply as respects any company unless it appears to the Special Commissioners, not only that income of the company has been or is to be expended or applied for one or more of the purposes mentioned in the said paragraph, but also that the company has not in fact distributed a reasonable part of its actual income in such a manner as to render the amount distributed liable to be included in the
statements to be made by the members of the company of their total income for the purposes of super-tax.—[Mr. Churchill.]

Mr. D. HERBERT: I beg to move, in page 18, line 4, after the words last inserted, to insert the words:
(2) Sub-section (1) of the said section twenty-one shall have effect as if after the words "apportioned among the members," there were inserted the words "and super-tax shall be assessed and charged under the provisions of this section in respect of the sum so apportioned after deducting in the case of each member any amount which has been distributed to him by the company in respect of the said year or period in such manner that the amount distributed falls to be included in the statement of total income to be made by that member for the purposes of super-tax.
If I am right in hoping that the Government will accept this Amendment, it will be unnecessary for me to do more than to explain very shortly its object. It is to correct an injustice in the Act of 1922. Hon. Members who are well acquainted with this subject will understand that Super-tax under this particular legislation was made chargeable against, and payable by, the company and not by the shareholder; and, if a company was convicted, if I may use that expression, then under Section 21 of the Act of 1922 Super-tax was charged against the company on the whole profits, whether distributed or not, and there was a scheme under which the particular shareholder could afterwards claim relief as against the tax in respect of the profits which had been distributed to him. That had this hardship; that the tax was charged, not against the offending shareholder, but against the company and was borne by the funds of the company, in which there might be interested persons who were not Super-tax payers at all. The Amendment also simplifies the charge of the Tax under Section 21 of the 1922 Act.

Mr. EDWARD GRENFELL: I beg to second the Amendment.

Mr. CHURCHILL: The Government accept this Amendment.

Amendment agreed to.

Further Amendment made: In page 20, line 43, at the end, insert the words—
(8) The following shall be substituted for paragraph 9 of the First Schedule to The Finance Act, 1922:—
'9. The income apportioned to a member of a company, so far as assessable
and chargeable to super-tax under section twenty-one of this Act, shall for the purposes of that tax be deemed to have been received by him on the date to which the accounts of the company for the year or period were made up or, if an application in that behalf is made by the company to the Special Commissioners at any time within the period limited by this Schedule for giving notice of appeal against the direction to the Special Commissioners, on such date as those Commissioners determine to be just, having regard to the dates on which distributions of income have been made by the company and so as to avoid, as far as possible, the inclusion for the purposes of super-tax for any year of income referable to more than one year.'"—[Mr. Churchill.]

Mr. H. WILLIAMS: I beg to move, in page 20, line 43, after the words last inserted, to insert the words:
(g) If a company is dissatisfied with the determination of the Special Commissioners and appeals to the board of referees in accordance with the provisions of the First Schedule of The Finance Act, 1922, for a rehearing of the case, and the board of referees are satisfied on the evidence placed before them that the whole of the income of the company for that year or period could not reasonably have been distributed, they shall state the amount which in their opinion could have been so distributed, and notwithstanding anything in section twenty-one of The Finance Act, 1922, the amount so stated shall be deemed to be the income of the members of the company, and the amount thereof shall be apportioned among the members.
This is a point I raised in Committee, though in a somewhat different form. When I moved it in Committee the hon. Member for Hereford (Sir S. Roberts) put up a strong case which so impressed me that I withdrew the proposal, and I have brought it forward again now in a different form, because it seems to me a great hardship on people who, quite innocently, have offended against the law should find themselves involved in penalties far greater than the offence they have committed. The Amendments accepted to-day have modified the scheme very materially, and, of course, have met many of the objections to it. I should like to say how much I appreciate the way in which the Chancellor of the Exchequer has carried out the promises he gave to me in the Committee stage, and I believe that honestly conducted companies will now be able to carry on with the certainty that they are not going to be hampered in a way they felt they might have been. I say that
deliberately, because great alarm has been caused, and it is only right that those who have now come to the view that the position is perfectly safe should say so and contribute their share towards allaying the alarm that has existed. The Chancellor of the Exchequer, when he gave the House masses of statistics, appeared to be justifying the whole Clause on the same ground that the illegitimate baby was excused; that it was only a little one. He said that private companies did not make a great deal of profit. This Clause deals with many public companies, and for that reason his statistics not so pertinent.

Mr. SPEAKER: I am not sure about the hon. Member's Amendment. Is it proposed in substitution for paragraph (5) of the First Schedule of the Finance Act, 1922, or is it a new paragraph?

Mr. WILLIAMS: It is a new paragraph.

Sir F. MEYER: I beg to Second the Amendment.

The ATTORNEY-GENERAL: The Government are unable to accept the Amendment. The hon. Member for Reading (Mr. H. Williams) said it was designed to protect those who, in perfect innocence, had not distributed or had put aside rather too much to reserve from undue penalties, but I think he himself will recognise, and I hope the House will reecognise, that the Clause, especially as amended, does not deal with people who in perfect innocence put aside a little too much. What it does deal with, certainly as now amended, is the person who, with the express intention of trying to escape the burdens which other people have to bear, deals in a certain manner with money which ought legitimately to have gone into his pocket and paid Super-tax, in order that by another means he may get it into his pocket without paying the tax. The only effect of the Clause as it now stands will be that the company which is convicted of that sort of tax evasion shall for the year be deprived of the privilege of company immunity and thereby be put in the same position as every private firm in the country.
The hon. Member for Oxford City (Captain Bourne) suggested that the right course was to deal with these private companies who were trying to
avoid taxes by depriving them of the privilege of incorporation. What we are in effect doing, as the Clause stands, is to deprive them of the privilege of non-liability to Super-tax for the one year and, to that extent to deprive them of the privilege of incorporation for that year and that year only. I think that is not an undue penalty to be imposed on people who are trying to use the Company law for illegitimate purposes. To go further would involve very great complication in deciding what was a proper distribution of money and would also really put a premium on people trying to escape having to pay if they felt that they suffered no penalty for it.

Amendment negatived.

Ordered, "That further Consideration of the Bill, as amended, be now adjourned.—[Mr. Churchill.]

Bill, as amended, to be further considered to-morrow.

Orders of the Day — SHERIFF COURTS AND LEGAL OFFICERS (SCOTLAND) [MONEY].

Resolution reported,
That it is expedient to authorise the payment out of moneys provided by Parliament of the sums which, under any Act of the present Session to amend the Law relating to the offices of sheriff clerk, procurator fiscal, and commissary clerk in Scotland, and to make further provision regarding the sheriff courts, may become payable in respect of—

(a) salaries and other allowances to persons holding the office of sheriff clerk, procurator fiscal, or commissary clerk, and to deputes, clerks, or other assistants of such officers;
(b) the grant in accordance with the Superannuation Acts, 1834 to 1919, of superannuation and other allowances to or in respect of the above-mentioned officers appointed after the passing of such Act, or appointed prior thereto and not having attained the age of 55 on the 1st October, 1918;
(c) the grant on retirement to or in respect of such existing officers as are not eligible for superannuation allowances of gratuities not exceeding in the case of any such officer twice the
200
amount of the salary and emoluments, received by him from ally source whatsoever in respect of his office during his last year of service;
(d) the payment of expenses incurred by a procurator fiscal in any proceedings taken by him or at his instance."

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."

Mr. BUCHANAN: In the first place I want to say that this Motion was on the Order Paper for the Committee stage last week, and I had always understood that it appeared on the Order Paper on Report also. I expressed my views on it on Friday last in Committee, and on the Report stage I only want briefly to enter my protest against the Resolution being taken at all. The way in which the Sheriff Officers in Scotland have been treated has been monstrous, and why the Opposition ought not to divide against it I cannot understand. I only want formally to enter my protest against it.

Orders of the Day — DESTRUCTIVE INSECTS AND PESTS [MONEY].

Resolution reported,
That it is expedient that there shall be paid out of moneys provided by Parliament such sums as may he payable by the Minister of Agriculture and Fisheries under any Act of the present Session to amend the Destructive Insects and Pests Acts, 1877 and 1907, as compensation in respect of any crop removed or destroyed by or under instructions of an inspector authorised by the Minister, and any other expense incurred by the Minister in the execution of the said Destructive Insects and Pests Acts, 1877 kind 1907.

The remaining Orders were read, and postponed.

It being after Half-post Eleven of the Clock, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at One Minute before Twelve o'Clock.